Whenever an Invoice is paid by one of your Clients, the payment is instantly split into two payments; one for your company, and one for your Tutor(s). Whenever a split payment Invoice is raised, a Payment Order is automatically created for your Tutor. When that Invoice is paid via Stripe, the payment is automatically divided into your company’s commission rate and the Tutor’s pay rate, and Stripe will then process both of those payments to their respective payees.
How do I set up split payments in TutorCruncher?
In order to use split payments, you will first need to sign up to a Stripe account via TutorCruncher. Once that is done, navigate to System > Settings > Card Payments with Stripe and open the ‘Settings’ tab of your Stripe account overview, where you will find the ‘Split Payments’ checkboxes - here you will have the option to enable or disable split payments on your branch.
You will also need to ensure that the Tutor assigned to the Job/Lesson that you want to have split payments for is signed up for a Stripe payouts account. Your Tutors can do this by logging into TutorCruncher and opening the 'My Profile' section of their dashboard. From there, they can select Sign Up Now within the 'Payouts Account' panel on their profile to sign up for a Stripe Payouts account.
An example of a Tutor's profile, with the 'My Profile' tab and 'Payouts Account' panel both highlighted.
Do I need to operate as an employment agency if I’m using split payments?
Not necessarily - while we built split payments functionality with employment agencies in mind, you can still use split payments even when acting as a regular employment business. That said, with split payments it is currently only possible to charge VAT on your company’s commission rate - we do not advise using split payments if you are seeking to charge VAT on the full charge to a Client.
How do I raise a split payments Invoice?
Split payments Invoices are raised at the point a Lesson is marked as ‘Complete’. If you have split payments enabled, there will be an indication of whether or not the Lesson is going to be paid using split payments in the Lesson’s status panel.
An example of a Lesson status panel where the Lesson will be paid for using split payments.
Marking a split payments Lesson as ‘Complete’ will automatically raise an Invoice to the Client and Payment Order for the Tutor. Invoices and Payment Orders raised using split payments will appear in the respective Raised Invoices/Raised Payment Orders and will be labelled as such.
An example of a Raised Invoices page, showing two invoices raised using split payments.
If you navigate to a raised split payments Invoice, you can quickly find the associated Payment Order for that invoice under that Invoice’s payment summary.
An example of an Invoice, with the payment summary section highlighted.
Can credit paid in via Credit Requests or account top ups be used to pay split payments Invoices?
No - Invoices using split payments have to be via Stripe - they cannot be paid for using pre-existing credit that a Client might have in their balance from Credit Requests or any other means.
Why am I being charged a transaction fee?
The transaction fee is an automated payout fee of 0.15% deducted from your company’s share of the payment whenever you issue an Invoice using split payments. This is the charge that TutorCruncher collects each time you process an Invoice in this way - you can read more about those charges here.
If split payments Invoice is paid for using American Express, then an extra 2% fee will be added - as passing card fees onto the customer is illegal in the UK, this extra fee will be incurred by the company.
What happens when I refund a split payment Invoices that was processed via Stripe?
Refunding Invoices paid via Stripe works the same way as refunding any Invoices (read more about that here) - the difference lies in how that refund is processed.
When refunding an Invoice that is being processed via Stripe, TutorCruncher will check both your Stripe balance, and that of the associated Tutors on the Lesson for that Invoice. If both parties have enough funds available in your respective Stripe accounts, then we will initiate a transfer from your accounts to ours, then onto the Client. Both the Invoice and Payment Order will be marked as ‘Void’.
These are the different refund statuses and what they mean:
Transfer Transaction is Pending: The money transferred to the company/Tutor hasn’t yet reached their account and as such isn’t yet available to be paid out to their banks. The refund will execute once the money has reached the recipient banks.
Tutor Transfer is Available: The money has reached the Tutor’s Stripe balance (this takes around seven days). We can now take the money from the company.
Company has Insufficient Funds to Pay on Behalf of Tutor: When paying on behalf of the Tutor, we don’t allow the refund to go ahead if the company has not got enough funds in their Stripe account.
Company is allowed to go negative: Stripe allows us to take money from an account even if the money isn’t there yet - this is capped by default at -£200. Only companies are allowed to go negative; not Tutors.