::: A Formula Required :::

Synopsis
========
I have a membership web site whereby members pay either $9.99 or
$12.97 for a monthly membership. I use PayPal to accept ALL payments
into my PayPal. I have a partner that I need to pay HALF of the NET
monthly profits to.

Problem is that PayPal charge a fee to 1) process a credit card
transaction, and 2) a fee to send a payment.

Therein lies the problem. I need both my partner and myself to
receive, after fees, the exact same amount of money.

Here is what happens:
=====================
PayPal charge 3.2% + 0.30 USD per transaction. Therefore I incur the
following charge when I receive a membership.

EXAMPLE:

RECEIVE -> FEE -> NET
$9.99 -> $0.62 -> $9.37

There is then another fee to send my business partner there half (once
a month), as they also incur a 3.2% + 0.30 USD fee on the transfer
amount.

Multiple:
=========
So far, we receive about 100 subscriptions every month of $9.99 and
about 50 at $12.97.

Each end every transaction is charged 3.2% + 0.30 USD.

Back to the required formula:
=============================
Obviously the half that is sent to my business partner is one lump sum
that will only incur ONE fee of 3.2% + 0.30 USD.

I need to factor in the charge that they will be charged and over pay
them, so after fees, our amount will be EQUAL for us BOTH!

1) IS THERE A FORMULA THAT WILL ENABLE US TO BOTH GET THE EXACT SAME
50/50 CUT OF NET PROFITS AFTER ALL FEES.

2) WHAT IS THE FORMULA :)

Regards,
Andre

Hrm, I guess Ace withdrew his answer.  Well, here's mine again, just
for completeness:

Where X is the lump sum profits that Andre would like to split equally:

Andre would send his partner the following amount:
(X + 0.3) / 1.968

After fees, the partner should have received the following amount,
which should be equal to Andre has remaining in his account:
(0.968*X - 0.3) / 1.968

So, the example is, suppose they make an even $100:

Andre sends:
($100 + 0.3) / 1.968 = $50.97

This leaves him with $49.03

Andre's partner receives:

$50.97 - ($50.97 * .032) - .30 = $49.04

So because of a rounding issue, Andre's partner gets 1 cent more.  But
that's about as close as we could get it.

---

Clarification of Answer by notyou-ga on 02 Jun 2004 16:49 PDT

Oh, one other thing Andre:

Your question makes the assumption that PayPal charges you a fee to
accept payments.  And that's true, *if* those payments are funded by
credit cards.

However if your partner has a Personal PayPal account (as opposed to
Premier or Business), there should be no charge for him to accept
money sent out of your PayPal funds (or out of your checking account,
say).

But I'm guessing that since you stated up front that there was a fee,
that your partner has already upgraded.  This is one of my big gripes
with PayPal (charging a fee to transfer money that's in *their*
coffers!) but that's an answer for another question.  :-}

GREAT -- Answer was exactly what I was looking for :)

Hey ace --

I think your calculations are correct, but it still doesn't solve
Andre's problem, which is:  How much does he PayPal to his partner so
that they get an equal cut of the profits?

The answer, courtesy of my co-worker, is the following:

Where X is the lump sum profits that Andre would like to split equally:

Andre would send his partner the following amount:
(X + 0.3) / 1.968

After fees, the partner should have received the following amount,
which should be equal to Andre has remaining in his account:
(0.968*X - 0.3) / 1.968

So, the example is, suppose they make an even $100:

Andre sends:
($100 + 0.3) / 1.968 = $50.97

This leaves him with $49.03

Andre's partner receives:

$50.97 - ($50.97 * .032) - .30 = $49.04

So because of a rounding issue, Andre's partner gets 1 cent more.  But
that's about as close as we could get it.

Hope this helps!

--Darryl