That 1% the marketplace keeps from your payout? Here's what it really is

If you've looked closely at your Shopee or Lazada settlement report lately, you've probably noticed a small line eating into your payout — about 1% of your gross sales, gone before the money even reaches you. A lot of sellers assume it's just another platform fee. It isn't.

Since RR 16-2023, online marketplaces are required to withhold 1% of your sales and remit it to the BIR on your behalf. Think of it as your income tax being paid in advance, in tiny installments, every time you get a payout. The key word is creditable — that 1% is money you can claim back against the income tax you owe at the end of the year.

Why this matters more than it sounds

Say you did ₱200,000 in gross sales on Shopee last quarter. The platform would have withheld around ₱2,000. Do that across three marketplaces and a few quarters, and you're suddenly talking about real money — money you've already paid the government but won't see again unless you actually claim it on your return.

The catch is that you only get the credit if you have the paper to back it up: Form 2307, the certificate of creditable tax withheld, which each platform issues you. No 2307, no credit. And the totals on those 2307s need to match what was actually withheld on your settlements — which, if you're doing it by hand across three Seller Centers, is exactly where things tend to fall apart.

What to actually do

Download your 2307 from each marketplace every quarter and keep it. When you file, add up the withholding and deduct it from your income tax due. If the numbers don't tie out, find out why before you file — an unclaimed ₱8,000 is ₱8,000 you handed over for nothing.

This is the boring, easy-to-miss part of selling online, and it's exactly the part we built KitaTax to handle: import your settlement CSVs, and we line them up against your 2307s so you can see, peso for peso, whether your withholding is fully accounted for.