--- title: "How tax applies to payments, splits and commissions" description: "Where each tax rate lands, why a commission can pay out without GST, and how to fix tax after a payment already exists." lastModified: "2026-08-27" lang: "en" wordCount: 2193 url: https://qualyhq.com/training/settings/tax-on-payments-splits-and-commissions --- ## Site navigation - [For schools](/international-education/for-schools.md) — For international education schools - [For agents](/international-education/for-education-agents.md) — For international education agents - [Explore](/training.md) — Watch videos on how to use Qualy - [About](/about.md) — Learn about Qualy's mission and values - [Pricing](/pricing) - [5-min demo](/demo.md) - [Login](https://dashboard.qualyhq.com) # How tax applies to payments, splits and commissions > One rate per document—and the places that catches people out. ## At a glance - **Intended for:** Admins & accountants - **Available in:** All plans - **Reading time:** 6 minutes - **Last updated:** 8th August 2026 ## Quick summary A tax rate charges nothing until it is attached to something. Three things can carry one: a payment, a payment split, and a partner's commission rule. Each carries exactly one rate, which is why a single transaction can produce several tax lines—one for the money coming in, one for each commission going out. The commission rule is the one that matters most, because it is the default that flows into every new payment for that partner, and a rule with no rate quietly pays the partner without tax. Split tax can still be changed while the split is Pending, Due or Overdue, one at a time or in bulk. ## Overview Creating a tax rate in **Settings → Tax rates** charges nobody anything. The rate has to be attached to a document, and there are three that can hold one: - a **payment**, for tax you charge the customer - a **payment split**, for tax on money going out to a partner or supplier - a **partnership commission rule**, which is the default that flows into every new payment for that partner Each holds exactly one rate. That constraint is the reason a single student payment can still generate several tax lines — the payment has its own, and every commission split hanging off it has its own. ## Tax on a payment The rate applies to the whole payment. There is no per-item tax; a payment with five line items has one rate covering all five. Open a payment and the card shows three lines: **Subtotal**, **Taxes**, **Total**. With an exclusive rate the tax appears against Taxes and the Total goes up. With an inclusive rate the Total does not move at all, because inclusive tax is already inside the price — Qualy reports it rather than adding it. To change the rate on a payment that already exists, edit the payment. The rate is not locked once the payment is raised. ## Tax on partner commissions This is where the money errors happen, so it is worth being precise about the order things occur in. A partnership has a **Payment splits** section listing its commission rules — a type, an amount, a description, and a **Tax** column. Those rules are defaults: the section says so directly, *'The split information set here will be used in payments and transactions. You can customize case-by-case later.'* When a payment involving that partner is created, Qualy builds the split from the matching rule and copies its tax rate onto the split. A commission rule with an empty **Tax** cell creates splits with no tax. The partner is paid the commission and nothing more. If that agent is registered for GST, the GST never appears — no error, no warning, and it is usually the agent who notices first. ![A partnership's Payment splits section with three commission rules charging Exclusive GST and a fourth with a blank Tax cell](/images/training/settings/tax-on-payments-splits-and-commissions/06-commission-tax-column.png) Scan the Tax column on every partner who charges tax. An empty cell on one rule out of four is easy to miss and is the single most common tax problem we see. Duplicate partnership records cause the same symptom. Where an agency exists twice and only one record carries the tax rate, payments raised against the other one pay commission without tax. Check for duplicates before assuming the rule is wrong. ### The Keep percentage exception On a **Keep percentage** split, the tax is calculated on **the amount you keep**, not on the split amount. Every other split type taxes the split amount. The logic holds up — keeping a percentage means the retained share is your commission revenue, so that is what bears the tax — but it means a hand-calculated figure will not reconcile if you apply the rate to the wrong base. ## Fixing tax after the fact Attaching a rate to a commission rule changes what happens next. It does not reach back into splits that already exist. For those, the split carries its own tax you can change directly: 1. Find the split and click its tax icon. A **Update tax rate** picker opens. 2. Choose a rate, or clear it. For more than a handful, select them in the splits list and use the **Update tax** bulk action, which applies one rate across the selection and can also clear tax entirely. Either way, only splits in **Pending**, **Due** or **Overdue** can change. Anything else is refused with 'Payment split status does not allow tax updates' — once the money has moved, the tax on it is history and belongs in a correction rather than an edit. ## Tax invoices and RCTIs Tax on a commission usually has to be evidenced by a document. Under **Payout preferences** on a partnership you choose which one Qualy generates: a **Tax Invoice**, issued by the supplier, or a **Recipient Created Tax Invoice**, issued by you on the partner's behalf. Agent commissions commonly use the RCTI. Qualy will not accept both for the same partner. The same panel tells you whether tax invoices are being created automatically, which is worth checking on any partner whose accountant keeps asking for paperwork. ## Sending tax to your accounting system Xero, QuickBooks and Conta Azul each map your Qualy tax rates onto their own, configured in the integration's settings under a Taxes section. The mapping is not the only thing that decides the tax that lands. The account a commission line posts to carries its own tax treatment, and an account configured as GST-free strips the GST on sync even when Qualy calculated it perfectly. That failure is quiet and it scales: it is entirely possible to sync dozens of bills before anyone reads one. Bills already approved and paid on the accounting side are locked and have to be fixed there. ## Reporting on tax Two views, for two different jobs. The **dashboard home** carries a **Tax overview** — Tax received, Tax pending and Total tax — broken down year to date, this month and upcoming. It covers **splits only**, so it answers "what do I owe on commissions" and not "what did I charge customers". For anything going to an accountant, use **Exports** (under **More** in the main menu) and the **Tax** dataset. It returns one row per tax line across both directions, with columns for the rate, the type, whether it was inclusive, the country, the counterparty and the tax base. Starter reports cover the usual questions — what your tax position is for the period, how much tax you charged customers, and how much tax sits inside what you paid out. ## Two things that are not tax rates **IOF on Brazilian settlements.** Charged when a payment settles across borders, handled by its own setting rather than by a rate. You choose whether to **charge the payer**, which adds it on top of the amount due, or **absorb it**, which takes it out of your settlement. **Your own tax IDs.** Your ABN, CNPJ, VAT number and the like live in Billing information and Compliance. They identify you on documents; they do not charge anything. ## Frequently asked questions ### Why was GST not deducted on this agent's commission? Almost always because the partner's commission rule has no tax rate attached. Open the partnership, expand Payment splits, and look at the Tax column—an empty cell means that rule creates splits with no tax, so the partner is paid the commission and nothing else. Attach the rate to the rule so future payments pick it up, then fix the splits that already exist from their own tax dropdown. Second most common cause: two partnership records for the same agency, where only one carries the rate and payments were raised against the other. ### I attached a tax rate to the partner. Why are the existing splits still untaxed? A commission rule is a default for new payments, not a retrospective change. Splits created before you attached the rate keep whatever tax they had, which may be none. Change those individually from the tax dropdown on the split, or select them in the splits list and use the Update tax bulk action. Only splits in Pending, Due or Overdue status can be changed—anything already paid is fixed. ### Can I change the tax on a split after it has been created? Yes, while the split is Pending, Due or Overdue. Click the tax icon on the split and pick a different rate, or select several splits and use the Update tax bulk action, which can also clear the tax entirely. Splits in any other status refuse the change with 'Payment split status does not allow tax updates', because the money has already moved. ### On a Keep percentage split, what is the tax calculated on? The amount you keep, not the full split amount. Keep percentage is the split type where you retain a share and forward the rest, so the tax there is tax on your own commission revenue. Every other split type calculates tax on the split amount itself. This trips people up when they check a figure by hand and cannot make it match. ### Can one payment have more than one tax rate? A payment carries a single rate, applied to the whole payment rather than to individual line items. Several tax lines on one transaction come from the other documents involved: the payment has its rate, and each payment split going to a partner has its own. Money in and money out are taxed separately, which is what the Tax export is built to reconcile. ### My GST is correct in Qualy but arrives at zero in Xero The mapping is the usual culprit rather than the rate. Qualy maps each of your tax rates onto a tax rate in the accounting system, and the account a commission line posts to has its own tax treatment. If that account is configured as GST-free in Xero, the GST is stripped when the bill syncs even though Qualy calculated it correctly. Check the tax mapping in the integration's settings and the tax setting on the destination account. Bills that have already been approved and paid in Xero are locked and have to be corrected there. ### Where do I see how much tax I have collected? Two places. The dashboard home has a Tax overview showing Tax received, Tax pending and Total tax across your splits, broken down year to date, this month and upcoming. For anything you need to file or hand to an accountant, use Exports and the Tax dataset, which gives one row per tax line and covers both tax charged to customers and tax on partner commissions. ### Does the Tax overview on the dashboard include tax charged to customers? No. That overview covers tax on splits—the money going out to partners and suppliers. Tax you charged customers on their payments is not in those tiles. Use the Tax dataset in Exports for a figure covering both directions; it has a direction column so you can sum each side separately. ### How does tax work on a refund? Refund tax is entered on the refund itself, not inherited from the rate on the original payment. When you create a refund you can set a Reducing tax percentage and choose whether it applies after currency conversion. Tax that was inside the original charge is reversed as a booking entry and does not reduce what the customer gets back—only a tax genuinely retained on the refund does. ### Is IOF on Brazilian settlements a tax rate? No, and it is not managed under Tax rates. IOF is charged when a payment settles across borders, and Qualy handles it as a separate setting: you choose whether to charge the payer, which adds it on top of the amount due, or absorb it, which takes it out of your settlement. It appears on transactions and payouts as a withheld tax rather than as one of your rates. ### What is the difference between a Tax Invoice and an RCTI? A Tax Invoice is issued by the supplier; a Recipient Created Tax Invoice is issued by you on the partner's behalf, which is common with education agents. You pick one per partner under Payout preferences on the partnership, where Qualy also shows whether tax invoices are created automatically. It has to be one or the other—Qualy will not let you enable both for the same partner. ### A commission rule shows an Archived badge on its tax rate. Is it still charging tax? Yes. Archiving a rate removes it from the pickers but never detaches it from anything already using it, so that rule keeps deducting the archived percentage on every new split it creates. The badge, with its tooltip 'This tax has been archived, and is most likely outdated', is there so you can find those rules and repoint them at the current rate. ## Prefer doing this via the Qualy API? Head over to our developer docs for everything you need—endpoints, examples, and simple how-tos. 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