Is Commission a Business Expense

[landonc14]

I own a freelance company, where we pay our freelancers 90% per commission. For example, a $100 commission, I only make $10. When it comes to taxes, will I need to pay tax on the $100, or will the $90 count as an expense?

[ATClare95]

Yes, commission is an allowable business expense. Your freelancers will pick up the commission as income on their tax return. Note, if you pay any of your freelancers more than $600 in commission during the year, you will have to report it on a 1099-MISC as non-employee compensation. This is assuming that your freelancers are truly independent contractors and not employees.