In Box 7 many companies report the Net amount after fees are taken out. As a former real estate sales manager, I can tell you many 1099s as well as Managers have zero idea on how to calculate pay-fees on gross receipts. Not all companies do the math this way. Some companies calculate fees on net receipts. Many of these companies are practicing tiered franchising but not disclosing. Some aren't even a franchise. It should state in the contract fees are on gross receipts. Some states also have business opportunity laws (but now I am going down a rabbit hole). It's difficult to deduct a royalty payment if the 1099 worker doesn't even know they were paying royalties aka "brand fee" or "marketing fee". Uber, Lyft, Doordash, Wag, and many real estate companies all calculate their fees based on gross receipts. If it's a publicly traded company, you can read the 10K and usually find out if the 1099s are paying royalties. I just pulled out my old 1099 from two different real estate companies. They are both reporting the amount paid to me AFTER fees and royalties deducted. My advice, if the company won't give you a break down and math on deductions, RUN. Transparency is kinda of a thing these days. PS. Franchising and 1099s don't mix.
