How authorised person revenue sharing works

The basic model

When an AP's client trades, the client pays the broker brokerage plus statutory charges (exchange transaction charges, SEBI fees, stamp duty, GST and securities transaction tax where applicable). Statutory charges go to the exchange and government, not to the broker. The broker then shares an agreed percentage of its brokerage income from those clients with the AP.

Gross vs net brokerage

• Gross brokerage share: your percentage applies to brokerage before the broker deducts its own costs.
• Net brokerage share: your percentage applies after deductions such as platform fees, payment gateway costs, call-and-trade charges or a fixed per-client cost.

A higher percentage on net brokerage can pay less than a lower percentage on gross brokerage. Always ask for a worked example using the same client activity.

A simple example

Imagine your clients generate ₹1,00,000 of brokerage in a month, and the broker's deductions are ₹20,000.

The numbers are illustrative only, not typical earnings. Many partners earn little at first, and income depends entirely on how many active clients you have and how they trade.

Other things that change your payout

• Zero-brokerage products: if clients mainly buy delivery equity at zero brokerage, there's nothing to share. Check which products actually generate revenue.
• Account opening income: some brokers share account opening fees or pay a one-time amount per funded account.
• Slabs: the percentage may rise with your monthly brokerage. Check whether a higher slab applies to all revenue or only revenue above the threshold.
• TDS and GST: payouts are usually subject to TDS, and if you are GST-registered you'll raise invoices with GST. Speak to a chartered accountant.
• Clawbacks and adjustments: bad debts, chargebacks or client disputes may be deducted later.

Clauses to read twice

1. How "brokerage" is defined, and the exact list of deductions.
2. Payout date, minimum payout and statement format.
3. What happens to revenue from your clients after termination.
4. Whether the broker can change the revenue share, and with how much notice.
5. Security deposit terms and refund timeline.

The same principles apply to international forex and CFD partner deals; see revenue share IB programs for that side.

How to ask a broker the right questions

Partner managers are paid to sign partners, so ask precise questions and get the answers by email:

1. "Please define brokerage in your agreement, and list every deduction before my share is calculated."
2. "For 100 clients who generate ₹1,00,000 of brokerage in a month, what exactly would I receive, after TDS?"
3. "Is the slab rate applied to my whole revenue or only above the threshold?"
4. "When are payouts made, what is the minimum, and what statement do I get?"
5. "After termination, do I keep earning on my clients, and for how long?"
6. "Can you change the revenue share during the agreement, and with what notice?"

Revenue share vs one-time payments

Some partner programs pay a fixed amount per funded account instead of, or as well as, a revenue share. One-time payments give faster, more predictable income but nothing if clients trade for years; revenue share is slower but grows with active clients. The right mix depends on your audience: active traders favour revenue share, while long-term investors who rarely trade may generate little brokerage. Be honest with yourself about how your audience really behaves.

Frequently asked questions

What is a good revenue share for an authorised person?

There's no single good number. Compare offers on the same basis (gross or net), the same deductions and the same payout timing, and look at support and platform quality too.

Is AP income taxable?

Yes. It is business income, usually subject to TDS when paid, and GST may apply if you are registered. Get advice from a chartered accountant.

Do I keep earning if a client stops trading?

No. Revenue share comes only from brokerage your clients actually generate, so inactive clients earn nothing.