There are three elements that contribute to the full cost of a lesson that a client pays. The majority of that sum is what the tutor gets paid, then there is the Tutorfair commission, a small amount of VAT, and a donation to our charity. The Tutorfair commission is what enables Tutorfair to provide our services to tutors and clients, while the optional donation to our charity makes up the "fair" in Tutorfair, with which we provide free tutoring to children in state schools. The VAT is the doing of Mr Taxman.
If you joined us after September 2016, or if you had been with us before that, but had not been active for a month at the time of the update, then your starting commission rate will be 30% of the hourly amount you wish to receive, for the first 20 hours you teach with us. This is before VAT and the Tutorfair donation are taken into account. The rate of commission then declines as you tutor more hours: from 21-40 hours the rate is 25%, from 41-60 hours this goes down to 20%, and once you have taught 60 hours then the rate drops to and remains at 15% for the rest of your career with us. The VAT cost is calculated as 20% of the Tutorfair commission applied, so if we take a 20% commission, then the tax amounts to 20% of 20%, or 4% of the lesson price.
The donation to the Tutorfair Foundation is 5% of the lesson price. When a client books a lesson, they will have the opportunity to opt-out and pay 5% less, so a client's decision regarding the donation will not affect the income of the tutor either way.
Sorry if all these numbers are a bit confusing! Let’s look at an example to make it clearer:
Let’s say you are a tutor and you would like to receive £50/hour. You have already taught 45 hours with us, so you are on the 20% Tutorfair commission rate.
As our commission is 20%, the £50 you receive is only 80% of the amount that is split between you and Tutorfair. This takes the lesson price up to £62.50.
For the VAT, 20% of the £12.50 commission is £2.50, so this brings the price up to £65.
Finally, the donation to the Tutorfair Foundation is 5% of the amount that is split between you and Tutorfair. 5% of £62.50 is £3.13, so the price of the lesson will be £68.13. You will be paid the £50 as promised, which is a lovely 73.39% of the lesson price!