For many people, the Betfair Premium Charge is not a concern. Simply put, it is an extra charge by Betfair to punters who are consistently winning on the website. Think of it as a tax on very successful people.
Do not mix this concept with Betfair commission. Betfair commission is what everyone has to pay having placed a winning bet on the exchange. Betfair charges a commission on winnings calculate the amount using a formula. Everyone who makes a winning bet on the Betfair exchange has to pay commission.
But, according to the Betfair website, ‘The premium charge is an additional charge. A charge that only applies to a tiny percentage (less than 0.5%) of our customers. The charge applies on accounts which make a profit and meets certain criteria.’
The Betfair Premium Charge is set every week and in one of two ways. The difference between 20% of the previous week’s gross profits and the total charges generated during the week. Or the difference between 20% of gross profits and the total costs created during the lifetime of the account. Whichever is less is the method used.
As you can see, this charge starts at 20%. Which, in most cases, even successful punters will never have to pay more than that. Yet, if you are a successful trader, you may find you are being hit harder than other customers.
If you have bet in over 250 different sports markets. And your account is showing a profit. Also, your total charges to date are less than 20% of your gross profit than you meet the criteria for Betfair Premium Charges.
You can immediately see why, based on these criteria, why the majority of people using Betfair will never have to worry about the Premium Charge. Besides, once you have met the requirements above, you get a £1,000 allowance. This amount is used to pay your initial Betfair Premium Charges. Once you have exceeded the quota, you will have to begin paying the charges yourself.
Keep in mind that any big wins which account for 50% or more of your gross profit are removed from the calculation. So, if you happen to land a massive win from one bet, this can make a difference in your final Betfair Premium Charges calculation.
Once you hit the level of Betfair Premium Charges, it is both a time to celebrate and commiserate. You have become a very successful trader. But in doing so, you are now losing an amount of the profit you have been making in charges made by Betfair.
Want to learn more about the premium charge? Check out BetAngel’s fantastic series on YouTube
Here is a betfair premium charge calculator to work out your charges
You have paid total charges of £980; all of which has been paid through commission generated.
You have not been charged any Premium Charges to date although you have fully used up your allowance of £1,000.
During the previous week you won £500 and paid total charges of £80.
You are therefore charged £20 in Premium Charges ((£500 x 20%) – £80 = £20).
You have won gross profits of £10,000 since joining Betfair having bet in 320 markets.
You have generated £1,050 in commission and paid no Premium Charge to date.
During the previous week you won £500 and paid total charges of £50.
In the absence of a charge allowance you would have been charged Premium Charges of £50 ((£500 x 20%) – £50 = £50).
However, the £50 is offset against the £1,000 charge allowance meaning that no additional Premium Charge is paid.
You then carry over the balance of your charge allowance (£950) to offset against potential future Premium Charges.
You have won gross profits of £8,000 since joining Betfair having bet in 500 markets.
You have paid total charges of £1,025, all of which has been paid through commission generated.
During the previous week you won £5,000 from a single market and paid total charges of £125.
As the win constitutes more than 50% of your total gross profits since joining Betfair, it is excluded for the purposes of calculating the Premium Charge.
However, the commission generated on the win does contribute towards total charges paid.
After the win is removed you have gross profits of £3,000 and total charges of £1,025 and therefore incur no additional Premium Charge.