US withholding: the tax on the US part of a Steam payment
US withholding is the tax Valve holds back from the part of a non-US developer's Steam payment earned on US sales, at a rate between 0.00% and 30.00%. Without a tax treaty the rate is 30.00%. A treaty can lower it, or remove it, once the developer claims it with Form W-8BEN in the Steamworks tax interview.
Last reviewed · SteamStats team
What Steamworks says
A reduced rate, including exemption, may apply if there is a tax treaty
- Most US-source income received by a foreign person is taxed at 30.00% in the United States. Without a treaty, Valve withholds 30.00% of the revenue share payment on that income and remits it to the IRS.
- For games and their DLC, the royalty rate for copyrights applies to US-sourced sales. Film and video use the royalty rate for film.
- The rate comes from the Steamworks tax interview, which states the withholding percentage at the end. Its result is visible to users with Actual Authority permission.
- Claiming treaty benefits needs Form W-8BEN, which in turn needs either a foreign or a US tax identification number.
- Partners who filed a W-8 receive Form 1042-S each year showing their US-source income. US taxpayers file a W-9 instead and receive Form 1099, unless they are a C or S corporation.
- The US share is the part of the payment earned on sales made in the United States. Valve multiplies by it to work out the tax, so sales elsewhere are not touched.
Why it matters
For a studio outside the United States, withholding is the one step in the chain from gross to payout that depends on the studio's own country and tax forms rather than on its players. The same sales can pay out differently in two countries, and a studio in a treaty country that has not claimed the treaty with a W-8BEN is withheld at the full 30.00%. Because the rate is set in the tax interview, it applies to every payment until the interview changes.
How the amount is worked out
- US withholding = developer share × US share × withholding rate.
- Payment = developer share − US withholding.
The developer share is what is left after Valve's revenue share is taken from net revenue. Withholding therefore never applies to gross revenue, to VAT or to Valve's own share, and a studio with few US buyers pays little of it whatever its rate.
Example: Pebblewick at four rates
Illustrative inputs for Pebblewick, the fictional demo game by Hollow Fern Games: a developer share of $20,000.00 in one month, of which 35.00% was earned on US sales. The treaty rates are examples; the real rate depends on the studio's country and the treaty.
| Case | Calculation | Withheld | Payment |
|---|---|---|---|
| No treaty (30.00%) | $20,000.00 × 35.00% × 30.00% | $2,100.00 | $17,900.00 |
| Treaty rate, example (15.00%) | $20,000.00 × 35.00% × 15.00% | $1,050.00 | $18,950.00 |
| Treaty rate, example (10.00%) | $20,000.00 × 35.00% × 10.00% | $700.00 | $19,300.00 |
| Exempt under a treaty (0.00%) | $20,000.00 × 35.00% × 0.00% | $0.00 | $20,000.00 |
Between no treaty and a full exemption the difference is $2,100.00 a month for the same sales. Whether tax withheld in the United States can be credited at home depends on the studio's own country; the 1042-S is the yearly record of the US-source income behind it. This page describes how Steam applies the rule and is not tax advice.
Where SteamStats shows it
The Money view shows US tax as its own step after Steam's share and before net to studio. The withholding rate is stored for the organization in Settings, so the chain matches the result of its own tax interview. The view is part of Indie, Studio, and Publisher.
Related terms
Sources
- Steamworks: Tax FAQ · checked November 1, 2026
- Steamworks: Payments and sales reporting FAQ · checked November 1, 2026