PLEASE NOTE: Split payments is only available to companies located in the UK. Credit cannot be used with split payments. If a user tops up their account using Credit Requests, then that credit cannot be used for split payments. More information on this here.
What are Split Payments?
Split Payments is a feature that splits payments instantly between the company and tutor. When a client completes payments for lessons they have received, then the payment is split between the agency and the tutors. The way you would issue those charges to clients is through invoicing. When that invoice is paid by the client, then the tutor can receive their payment as well on a payment order. Here's more information on how Invoicing (Client Charge) and Payment Order's (Tutor Payment) work within TutorCruncher.
How do I set up Split Payments for my company?
In order to use Split Payments, you must have sign up to Stripe within TutorCruncher.
If you currently use Stripe with TutorCruncher, then you may need to migrate to the new version of our integration.
To check if you need to migrate, go to System > Settings > Payment Integrations. If you have the option for "Card Payments with Stripe (Express)", then you just need to sign up to an account by following the instructions here:
If you don't have that option, then you need to follow the steps here:
Once that Express account has been set up, it would then be a matter of enabling the setting for Split Payments on that integration in your branch settings (Settings > Payment Integrations).
I act as an Employment Agency, what is the best way to set this up on my account?
If you operate, either in part or fully as an Employment agency, then you can set up your branch settings so that this will become the default for all of your clients. Go to Settings > Accounting > General and make sure to enable the checkbox for Operate As Employment Agency.
You can then choose whether or not, by default, you are acting as an Employment Agency for your clients on that same form. This will affect all clients where you have not overridden this value manually.
Once those have been set, you can go back to your Stripe Express settings (Payment Integrations > Card Payments with Stripe (Express)), and decide whether to split all payments, or split payments only where the company is acting as an employment agency.
Can I choose what clients I want to operate as an Employment Agency, or Employment Business with?
You can indeed! The first step is to ensure you have enabled the setting as shown above in your branch settings for Operate as an Employment Agency. The next step is to navigate to the client profile and then choose Actions > Edit Profile > Accounting. Here, you can choose to override whether or not the client you are acting as an Employment Agency, or an Employment Business with the corresponding client.
How do Split Payments work in TutorCruncher?
The first thing you will need to do is raise charges for your client, and this is done by raising an Invoice. Raising an invoice will check to see if any of your clients have been assigned to any completed Lessons in a specific date range. In order to raise an invoice, you will need to go to Accounting > Draft Invoices in the left-hand side of your login. When drafting invoices, you can choose the Regenerate tab at the top of the form and choose a date range that you want to charge clients for completed lessons. After you have created that regeneration, you'll notice a list of your clients that can be issued an invoice and how much they will be charged under the Draft Invoices tab. Drafting invoices allows you to see which invoices will be paid using Split Payments on the right-hand side, but also which invoices will not be.
If you want to see more details of each of your clients invoices before you send them, then you can click on the name of the client and view a full breakdown of the charges. The Invoice payment summary at the top of that page will also show what Payment Order the lessons are linked to, so you know what tutor will be paid off the back of that invoice.
Once you're happy that the invoices can be raised and sent to the client, then it would be a matter of confirming and raising those. You can read more information here on doing that.
Payment Orders will also be generated and raised automatically when you draft invoices (As the two of these are now linked). If you go to Accounting > Draft Payment Orders, you will be able to see what payments are going to be issued to your tutors. When you click on a tutors name in the draft list, you can also see a payment summary of that, and the corresponding lessons they are being paid for.
Once an invoice is confirmed the money will then be transferred automatically for the linked payment order, so your tutors will then get paid!
How does a Tutor sign up for a Payouts Account with Stripe?
In order for your company to be able to split payments between the client and tutor, Tutors will need to sign up for a Payouts Account from their login. Tutors can sign up for this by navigating to the Profile tab on their dashboard. From here, they'll be able to sign up on their profile under Payouts Account.
The next step is to choose the Sign Up Now tab, and this will redirect tutors to Stripe's sign up page (Similar to the one agencies fill out).
Finally, tutors would need to review all of the details they have entered, just to make sure they are all correct.
Here is a step by step visual guide on how tutors can sign up for Stripe Express:
When will tutors receive payments into their bank accounts?
There are 3 stages to the process in receiving funds to your bank account.
The client pays for their service. The money will then transfer to the tutor's Stripe account in 7 calendar days.
The funds are in the tutor's Stripe account and will be automatically paid out at the next payout date. By default this is on the last day of each month, but they can edit this in TutorCruncher
The tutor is also able to trigger a manual payout, which will transfer all available funds from your Stripe account. This is limited to once per calendar month.
The funds are transferred to the tutor's bank account.
Some of my clients have credit on their profile, can this be deducted off of a raised invoice being used to split pay?
Unfortunately credit cannot be used on any raised invoices being processed for split payments. In order for split payments to work, that needs to happen on the point of transaction or when the invoice is raised for the client. As credit can only be issued in advance of invoices being raised, this cannot be used on raised invoices processed this way.
This also makes sure that UK based companies operating as agencies can comply with the recent High Court Ruling EWHC 2461, which recognizes tutors as legally employed in any circumstance which involves their compensation (the money they are receiving) being handled or controlled by the tutoring agency. You can read more about that ruling here.
What happens if I want to void or issue a refund on an Invoice processed through Stripe Express?
If you want to void or refund an invoice, the first step would be to issue a Credit Note on that invoice.
When you choose to refund an invoice, TutorCruncher will check both your Stripe balance, and that of all associated tutors.
If you all have enough balance in your Stripe accounts, then we will initiate a transfer from your accounts to ours and then to the client. Both the Invoice & Payment Order will be marked as Void and the funds will be returned to the client. There are a few different scenarios in which refunds can be issued:
Transfer Transaction is Pending
The money transferred to the Company/Tutor hasn't hit their account yet and isn't available to be paid out to their banks. The refund will execute as these transfer transactions are still pending, so we can turn them back around without any worry.
Tutor Transfer is Available
The money has now hit the tutors stripe balance, should take 7 days. We will now take the money from the branch.
Company has Insufficient funds to pay on behalf of tutor
When paying on behalf of the tutor, we do not allow the refund to go ahead if the company hasn't got enough funds in their stripe balance.
Company is allowed to go negative
Stripe allow us to take money from an account even if the money isn't in the account. We have capped this by default at -200. This is only allowed for companies, tutors are not allowed to go negative.
What are 'Chargebacks'?
A chargeback is a charge that is returned to a payment card after a customer successfully disputes an item on their account statement or transactions report (In this case Invoices). A chargeback may occur on debit cards (and the underlying bank account) or on credit cards. If for example your client disputes a charge with their invoice, then a chargeback may be processed.
A client has opened a dispute about a charge and initiated a Chargeback, how do I deal with this?
When a chargeback is initiated, we get notified from Stripe about this and we will contact your company to let you know. Each chargeback request will be dealt with on a case by case basis to begin with. You as a company will have to submit supporting evidence to us within 6 weeks to prove the charge was legitimate (Usually through screenshots). We will then submit this evidence to the bank on your behalf from them to review it. If the bank reviews this information and believes the chargeback is legitimate, we will then charge the full amount to the company, plus Stripe’s chargeback fee (£15.00). There is no way to charge this to the tutor. If we see a lot of chargebacks, then we reserve the right to suspend your Stripe account.
Why am I being charged a 'Transaction Fee'?
The transaction fee is deducted from your company’s share of the payment whenever you issue an invoice using split payments. This is the charge Tutor Cruncher collects each time you process an invoice in this way. You can find out more about those charges here.
Can I use American Express cards for split payments?
You can indeed! You have the option of taking American Express payments, but just keep it in mind that these transactions may work out slightly more expensive to process. There will be an extra 2% charge on American Express payments. You cannot add a card fee onto transactions as this is deemed illegal in the UK, so you will incur that charge as an agency when processing these types of payments.
Do I have to use this form of receiving and sending payments?
We advise that any work you do that involves a tutor as a self employed contractor, teaching a private client in the UK, is done through Split Payments. We understand that a lot of work falls outside of this workflow, such as teaching in schools or LEAs, in which case you can choose whether to use Split Payments or not. This feature insures that our UK based companies operating as Agencies can comply legally with the 2020 High Court ruling EWHC 2461, which you can read about here. The Split Payments feature complies with the above ruling, by removing the necessity for the tutoring agency to ever handle money. Compensation is split between tutors and the agency at the moment of payment, all need for control over funds is removed.