Buyers Fees, Authors Fees and Tax Withholding.

As you only have VideoHive items which are subject to a 20% buyers fee, and you’re an exclusive author, you should be getting 50% of the total sales price… plus 1% for every $3,750 you’ve sold. So if your total sales equate to between $7,500 and $11,249, then the fees paid to Envato would be 48%.

The only way to improve that is to sell more items. The only way to correct earning less than you were expecting to earn, is to adjust your expectations to expect the correct amount!

Thank you for the useful post. As a new author (videohive) I have a few questions.

Is “buyers fee” a sum that Envato charges as a fee not an actual tax? If so, then Envato charge two times form a sale. At first 20% and then again 37,5% from item price as an authors fee. Which makes 50% of the list price. Am I right?

My second question is (in case the statement above is correct) why are they making authors pay tax’s for Envato. If author has to pay a tax (depends where they are located 0-30%) it is calculated form the sum that includes also Envato’ earning not form the authors earnings? Author has to pay tax from the item price, but that includes the 37,5% authors fee that is Envato’ own profit that’s addition to the 20%. I find it very strange. 50% fee is more than enough form a sale, why make author pay some of your taxes as well?! Or am I misunderstanding something?

Yes, the buyers fee isn’t a tax. [quote=“KoPro, post:22, topic:39239”]
If so, then Envato charge two times form a sale. At first 20% and then again 37,5% from item price as an authors fee.

This is kind of right. But the mindset you need to get into is that if an item is $10 and the buyers fee is $2… you’re not getting $10 and then having two lots of fees subtracted. You’re getting $8 with one fee subtracted. Your item price is $8 which is what shows up on your statement… the buyers fee is added on top but paid by the buyer, you never see any of that $2, so it;s not factored into the calculation when it comes to what you receive.

Not entirely sure why it’s calculated that way, but when it comes to paying tax it’s generally accepted that the correct procedure is to class the item price as your earnings, and the author fee as outgoings, so you’re then only liable for tax on the amount you actually receive (that’s tax in your own country… not withholding tax)… then if you’re in a country that has a tax treaty with the US, you can offset the amount Envato has already withheld from what you need to pay. So if you have $1000 withheld, and your tax bill for the year is $4000, then you only need to pay $3000.

One thing to note… whether Envato withhold 1% tax or 100% tax, it has no effect on their liability when it comes to tax. They can’t offset what you’ve paid against what they need to pay. They get two sources of income from the marketplaces… the buyers fee and the authors fee, which constitutes their revenue. What you pay tax on doesn’t alter their actual revenue, so the amount of tax they need to pay wouldn’t change whether you paid tax on the author fee or not. So you’re not paying Envato’s taxes for them.

Unless there’s some cunning tax avoidance scheme on the go which I haven’t managed to figure out yet… but the risk wouldn’t be worth the benefit. Prison time, massive fines etc etc… I can’t see it myself. It would have been easier to relocate to Andorra, Dubai or the Cayman Islands if they wanted to pay less tax.

Thank you for your answer. I’m just trying to figure out what’s what. So the buyers fee isn’t a tax (like VAT), it’s fictional amount of list price that is defined as “fee” and goes to Envato? If so then isn’t it still a percentage that Envato earns from author’s sale? Saying that it’s paid by a buyer is confusing when every sent on the “10$” is paid by the buyer, plus the price is set by Envato (for Videohive users).

Yeah, it’s just Envato’s cut of the money. The buyers fee can be a fixed dollar amount, or a percentage, depending on the marketplace. For example, on Themeforest, a Wordpress theme has a fixed buyers fee of $12. On VideoHive, the buyers fee is 20% of the list price.

Yes, every cent is paid by the buyer, but they give Envato $10 and Envato take $2 from that as their buyer’s fee (using a VH item as an example). The buyers fee is added on top of the item price to arrive at the list price. What’s left is your earnings, and from those earnings, you need to pay Envato the author’s fee.

Back in the day it was just a straight percentage… the item was $10 and you got 50% and Envato got 50%. That all changed back in 2014 when the authors fee and buyers fee were introduced. Not entirely sure why they changed it to make it more complicated, but it makes sense when it comes to items that are subject to author driven pricing, so maybe that was on the road-map from quite some time ago.

I see. Thank you. It would be nice to pay tax on 50% instead of 80%, but like you said they are making changes and maybe it’ll get better in the future. At the moment it’s very hard to get inspired to create exclusively for Envato when the numbers are like they appear in most profiles. Maybe it’s just a problem in Videohive where the time spent and money earned aren’t in balance. Anyway, many thanks for the help.

hi im from Portugal i see the tax in Portugal its 10% i write the W8 but i have a product 20$ and i sell 1 and im only win 11,87$ that´s right???

You did not sell to a US buyer = no withholding tax!

$20.00 - $1.00 = $19.00 ($1.00 fixed buyer fee)
$19.00 * 0.375 = $7.12 author fee
$19.00 - $7.125 = $11.87

In case of a sale to a US buyer
$20.00 - $1.00 = $19.00 ($1.00 fixed buyer fee)
$19.00 * 0.375 = $7.12 author fee
$19.00 * 0.10 = $1.90 us withholding tax
$19.00 - $7.125 - $1.90 = $9.97

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im a author exclusive is right? $7.12?

Exclusive Author Level 2 = 37.5% author fee

$19.00 * 0.375 = $7.12

Thank you for the explanation.

I am a foreign Authoer here, wanted to know what is the buyers fees about?
Since we had paid the Authors Fees (to Envato), and Royalty Tax WithHolding (To US Tax Dept), then what is the buyers fees about? And why we need to paid for it?

Your answer will be much appreciate.
This can help me to gains knowledge about the fees.

Your gross revenue consists of the item price, rather than the list price. The buyers fee is added to the item price and isn’t classed as your earnings (much like VAT or GST), as all fees and taxes are solely based on the item price.

The buyers fee is paid by the buyer. It’s a fee Envato charges them so they be granted the right to buy on Envato. At least that’s what they tell authors. I don’t know how this goes down with buyers though.

I have a question. I just sold my first audiojungle track with a list price of 15 dollars
How is it possible that after the author fee I am left with 5,40 dollars? That is before taxes (Im living in the Netherlands), after taxes my final balance is 1,80.
I read that the author fee is 55%, that would mean I should keep 6,25, before taxes, if I am correct?
thank you!

Author fee is subtracted from the item price, not the list price. The item price is the list price minus tge buyers fee. On a $15 track, the buyers fee is $3. If you check your statement, you’ll see $12, and the amount subtracted for the authors fee… which will be 55% of that.

Thanks for your reply, I meant the list price is 15 dollar, my item price wouild be 19.
On my statement there are 3 columns:
1: Sales earnings this mont, after associated author fees and before taxes: $5,40
2. your balance: $1,80
3. total value of your sales, before taxes: $15

Yeah, the list price is $15, the buyers fee is $3, and the item price is $12.

Hello dear …

Attach a photo to you explaining my purchase
I want to understand what percentage of commission is deducted from me while I am exclusively on Envato website
The number of sold sales exceeded $ 10,000 + on Envato Market

Go to Statements -> View Invoices and select the invoice for last month, there you can see your author fee rate in %

or take your last sale:
gross = 9.00
author fee = 3.15
(3.15 / 9.00) * 100 = 35%