Why does Buddy collect payments if you're not the seller?
Buddy acts as a payment facilitator to provide:
Secure payment processing
Automated booking confirmations
Payout management
Financial record-keeping
This is standard for booking platforms and marketplaces.
We facilitate payments on your behalf — we don't sell the service.
How does the payment flow work?
Here's what happens when a customer books:
Customer pays via Stripe (credit card, payment plans, etc.)
Buddy collects applicable sales tax (where required by state law)
Platform commission is calculated (typically 8-12% of booking value, based on your agreement)
Stripe processing fees are deducted (~2.9% + $0.30 per transaction)
Net payment is transferred to your bank account based on your payout schedule
Example:
Customer books: $100.00 activity Platform commission (10%): -$10.00 Stripe processing fee: -$3.20 Sales tax: Collected separately by Buddy ───────────────────────────── You receive: $86.80
All payment processing is handled securely through Stripe Connect.
How are commissions calculated?
Commission rates are set when you onboard to the platform and typically range from 10-16% depending on your agreement.
The platform commission:
Is deducted from each booking automatically
Appears on your payout statements in Stripe
Covers technology, payment processing, marketplace services, and operational support
You can view your specific commission rate in your account settings or by contacting [email protected].
When do I receive payouts?
Payouts are processed through Stripe based on your selected schedule:
Daily - Receive funds every business day
Weekly - Receive funds once per week
Monthly - Receive funds once per month
The amount you receive is the booking total minus:
Platform commission
Stripe payment processing fees
Note: Sales taxes are collected and remitted separately by Buddy and do not affect your payout amount.
You can configure your payout schedule in your Payment Settings.
Does Buddy handle sales tax?
Yes. As a U.S. marketplace facilitator, Buddy:
Collects sales tax from customers (where applicable)
Reports to state tax authorities
Remits directly to tax agencies
You do not need to collect or remit sales tax on bookings made through Buddy in states where we're responsible for marketplace facilitator tax compliance.
Sales tax is handled entirely separately from your payouts and does not reduce the amount you receive.
What are Buddy's tax responsibilities as a marketplace facilitator?
As a U.S. marketplace facilitator, Buddy handles two distinct areas of tax compliance:
1. Sales Tax Compliance: We collect, report, and remit sales tax where applicable under state laws. If a state considers certain activities or services taxable, we handle the sales tax on those bookings and remit it directly to tax authorities on your behalf. You don't need to take any action for sales tax compliance.
2. 1099 Reporting: Because we process payouts to your business, we're required to comply with IRS information reporting rules. We collect W-9 forms from U.S.-based businesses to gather legal names and tax IDs, enabling us to issue 1099-K or 1099-NEC forms at year-end if your earnings exceed IRS thresholds.
Do you withhold income taxes from my payouts?
No.
We do not withhold any income taxes from your payouts. Tax payment and filing on that income remains your responsibility.
We only:
Handle sales tax collection and remittance as required by state laws
Provide 1099 reporting for IRS compliance
Where can I view my payout details?
All payout details, including:
Transaction breakdowns
Commission deductions
Processing fees
Transfer history
...are available in your Stripe Dashboard.
For questions about your commission rate or payout calculations, contact [email protected].