Tax on eBay works differently in the US and the UK, and both catch sellers out in the same way: money that passes through your sale is not necessarily yours. This guide explains what to count and what to leave out. It is not tax advice — your own obligations depend on where and how you trade.
US sales tax: eBay collects it
In the states with a marketplace facilitator law, eBay works out, collects and pays the sales tax for you. The rate is set by the buyer's delivery address; where the state taxes postage, eBay taxes that too. The tax is added to what the buyer pays, and eBay passes it to the state — it never becomes yours. eBay's tax information page lists the states.
So in your books, sales tax collected by eBay is neither revenue nor cost. Count it as income and your sales look bigger than they are; count it as a cost and profit looks smaller than it is.
But eBay's fee is charged on the tax
There is one catch. The final value fee is worked out on the total sale including sales tax, and so is a Promoted Listings General fee. In our example, $3.20 of tax on a $39.99 sale adds $0.43 to the final value fee and $0.16 to the ad fee. The tax is not yours; the extra fee on it is.
Your own obligations do not disappear: in a state where eBay does not collect, or where you have your own presence, you may still need to collect and file. Check with your state or an accountant.
UK VAT on eBay's fees
eBay.co.uk quotes its business fees before VAT and adds 20% on top — on the final value fee, the per-order fee, the regulatory operating fee, ads and the rest. In our UK example, fees of £3.71 carry £0.74 of VAT.
- VAT-registered: you normally reclaim that VAT, so the fee cost is the amount before VAT.
- Not registered: you cannot reclaim it, so the VAT is part of what selling costs you.
UK VAT on your sales
If you are VAT-registered, your prices include VAT you owe HMRC: on a standard-rated item that is a sixth of the VAT-inclusive price. That part of the sale is not revenue. On the £24.99 example it is £4.17, and it is why the same sale makes £6.01 for a registered seller and £9.44 for one who is not. Enter your buying prices without VAT if you reclaim it on your purchases, so that both sides of the sum are on the same basis.
Private sellers pay no VAT on eBay's selling fees on domestic sales, because there are no selling fees to pay it on.
Open the eBay profit calculator Free, no sign-up — US and UK fees.
Baiord leaves the sales tax eBay collects out of revenue and costs, and subtracts only tax you are liable for yourself — so profit is the money that is actually yours. How Baiord calculates profit.
eBay's own pages
The rates and rules in this guide were checked against these on 30 October 2026. eBay changes its fees from time to time; its pages are the final word.