tax info

[Amroda]

Sorry I know this is not the best place to ask this but:
How much is deducted from a developer's earnings from a game on steam?
from my calculations it's a little troubling:

30% steam fee.
30% US tax (no tax treaty in my country)
20% local tax
20% game engine royalty.
That leaves me with a whopping 0%.
Surely there has to be some mistake in my calculations.

[Spawn of Totoro]

Taxes and expenses are the developer's responsibility.

You get the full 70% of the sale.

You pay your taxes when you file, so it is a good idea to keep some off to the side. You pay these directly by your tax laws.

Royalties are between you and the engine rights holder. You also pay them directly.

Yes, there is a mistake. You are only looking at % on the entire purchase. You need to look at direct numbers as well as your tax laws.

For example, 20% to the engine developer is a tax write off in the US. You can deduct a % of that from your taxes.

Your profits are also the 70%, not the whole cost to the buyer. $100, you get $70. You owe the developer 20% of that $70, not of the $100.

I suggest consulting a buisness advisor or similar. That way you can find out what you will have to pay an to who it will go, as well as what you will have left.

[fluxtorrent]

Yikes those are some hefty taxes XD depending on how and when they are applied it still won't total the full income of the game (deductions like that aren't additive, for instance if steam takes it's cut first the next one takes it off the percentage you get after that and so on. Playing with the order you have there

$100 - 30%
$70 - 30%
$49 - 20%
$39.20 - 20%
$31.36 return

if its per unit and your unit price is say $15 you make a unit price of about $4.70

[Start_Running]

Originally posted by fluxtorrent:

Yikes those are some hefty taxes XD depending on how and when they are applied it still won't total the full income of the game (deductions like that aren't additive, for instance if steam takes it's cut first the next one takes it off the percentage you get after that and so on. Playing with the order you have there

$100 - 30%
$70 - 30%
$49 - 20%
$39.20 - 20%
$31.36 return

if its per unit and your unit price is say $15 you make a unit price of about $4.70

Welcome to the world of business and development. This is actually par for the course for any business owner. And remember that 3136 is your revenue. Not your profit. Because remember you still have expenses and overheads to pay.

[Amroda]

thank you for the answers.

Originally posted by Spawn of Totoro:

Taxes and expenses are the developer's responsibility.

I suggest consulting a buisness advisor or similar. That way you can find out what you will have to pay an to who it will go, as well as what you will have left.

I think you're right, thank you. I'm really lost when it comes to royalties and taxes. XD

[cinedine]

Isn't VAT deducted first? At least here it is. Or didn't you even include it?

[Amroda]

Originally posted by cinedine:

Isn't VAT deducted first? At least here it is. Or didn't you even include it?

I did include it but I have no idea what to deduct first. :P It just seemed to me that with all those taxes I won't be left with much if I released a game on Steam. But I might be wrong, I'm not very familiar with tax laws.