How Commission Works
Betfair charges commission on your net winnings in each individual market. Commission is only ever charged when you win — losing bets incur no commission whatsoever.
The formula is simple: Net Profit × Commission Rate = Commission Charged.
Back Arsenal at 2.50 with £100 in a football market (5% commission rate).
Arsenal win. Gross profit = (2.50 − 1) × £100 = £150.
Commission = £150 × 5% = £7.50.
Net profit credited to your account: £142.50. Plus your £100 stake returned = £242.50 total.
If Arsenal lose: you lose £100 stake. No commission. Balance reduced by £100.
Market Base Rate (MBR)
The Market Base Rate is the standard commission rate for each market type before any loyalty discounts are applied. MBR varies by market:
| Market Type | Standard MBR | Notes |
|---|---|---|
| UK/Irish Horse Racing Win & Each Way | 2% | Lowest rate. High volume attracts reduced MBR. |
| UK Greyhound Racing | 5% | Standard sport rate |
| Football (most markets) | 5% | Standard sport rate |
| Tennis | 5% | Standard sport rate |
| Cricket | 5% | Standard sport rate |
| Golf, Basketball, Rugby | 5% | Standard sport rate |
| Some international markets | 5–7% | Varies by jurisdiction and market type |
The 2% horse racing rate makes UK horse racing markets particularly attractive for traders — the lower fee means a smaller edge is required to be profitable. This is one reason horse racing is by far the most popular trading sport on Betfair. For Australian horse racing and some other markets, rates may differ — check the specific market's rules page on Betfair for the exact rate before trading.
Net Winnings — Not Gross Turnover
This is critical to understand correctly: Betfair charges commission on your net profit per market, not on each individual winning bet, and definitely not on your total staked amount.
What "per market" means in practice: all trades and bets you place in the same market (same event, same market type) are netted together. If you place ten trades in the 3:30 at Newmarket and end up £50 ahead in total, you pay commission on the £50 — not on each individual winning trade.
You make 6 trades in the 3:30 Newmarket Win market (2% commission):
Trade 1: Back at 4.00, lay at 3.80 → +£18 profit
Trade 2: Back at 3.80, lay at 3.90 → −£8 loss (wrong direction)
Trade 3: Back at 3.90, lay at 3.60 → +£26 profit
Trade 4: Back at 3.60, scratch at 3.60 → £0
Trade 5: Back at 3.70, lay at 3.55 → +£15 profit
Trade 6: Back at 3.55, lay at 3.65 → −£9 loss
Net position in market: £18 − £8 + £26 + £0 + £15 − £9 = +£42 net profit.
Commission at 2%: £42 × 2% = £0.84. Net after commission: £41.16.
You are not charged commission on each of the three winning trades individually — only on the £42 net result.
Commission for Traders
The per-market netting is very favourable for traders. Losses in a market reduce the commission you pay on wins in the same market. A trader who makes £200 in ten profitable trades but loses £80 in five bad trades in the same market pays commission on the net £120 — not on the £200 gross winnings.
However, commission cannot be negative. If you end a market with a net loss, you pay zero commission — but you don't receive a commission refund either. There is no offsetting of losses across different markets.
This has an important implication for trading strategy: it's more commission-efficient to trade multiple positions in the same market (and take occasional losses there) than to spread activity thinly across many markets where each small win attracts a separate commission charge.
Break-even analysis with commission
For any trading position, your minimum required price movement to break even is not zero — it's the price movement equivalent to your commission cost. At 5% commission:
- A trade that makes £100 gross needs to net £95 after commission
- At 2% horse racing commission: a £100 gross trade nets £98
- For scalpers taking 1–2 tick profits: commission at 5% can consume an entire tick of profit in many price ranges
Scalping is harder to make profitable in 5% commission markets than in 2% horse racing markets. This is why most serious scalpers trade horse racing exclusively. See scalping guide for the maths in detail.
Loyalty Discount Programme
Betfair operates a loyalty programme that gives active bettors a discount on their Market Base Rate based on their lifetime betting volume. The more you've bet over your account's lifetime, the lower your effective commission rate.
Your effective commission rate = MBR × (1 − your discount percentage). The discount tiers are not publicly published in full by Betfair and change periodically — the current discount is shown in your account under "Betfair Rewards" or within the market's commission display.
Typical discounts range from 5–15% off the MBR for mid-volume accounts, up to higher discounts for the highest-volume accounts. For a typical recreational trader turning over £10,000–£50,000 per year, the discount might reduce the 5% MBR to 4.25–4.75% — meaningful but not transformative.
For very high-volume traders, the discount becomes significant. At a 30% discount, a 5% market becomes an effective 3.5% rate. The loyalty programme rewards consistency and high volume — exactly the profile of a professional trader.
The Premium Charge
The Premium Charge is an additional weekly levy on accounts that are both highly profitable and generating low commission relative to their profits. It affects fewer than 0.1% of Betfair users — almost exclusively full-time professional traders with exceptional, consistent win rates.
The charge kicks in when your lifetime net profits exceed a certain threshold AND your lifetime commission paid is less than 20% of your gross profits in that week. The charge is up to 60% of the net profit for that week.
The Premium Charge is designed to extract additional revenue from accounts that are systematically profitable but paying relatively little in commission (e.g. matched bettors who only win free bets, or traders who use the exchange but generate low turnover relative to profit). It does not affect the vast majority of users. If you're asking what it is, you're almost certainly not near the threshold. When you eventually are, it will require strategic adjustment to your approach. Full detail: Premium Charge guide.
How to Minimise Commission
You cannot eliminate commission, but you can reduce its impact on your P&L:
- Trade horse racing over football where possible. The 2% MBR vs 5% is a 60% reduction in commission cost. For the same trading strategy executed at the same odds, you need a significantly smaller edge to profit in horse racing markets.
- Build volume to earn loyalty discounts. The more you trade, the lower your effective rate. Consistent activity over months and years compounds the discount benefit.
- Trade larger stakes in fewer markets rather than small stakes in many markets. Your commission is the same percentage regardless, but transaction costs (time, attention, slippage) are lower per pound of profit when you size up on your best opportunities.
- Always trade in liquid markets. In illiquid markets, the bid-ask spread (difference between best back and lay prices) is wider. A wider spread means you need more edge just to break even — on top of commission. In liquid markets the spread is 1–2 ticks; in illiquid markets it can be 5–10 ticks or more.
- Account for commission in every trade target. If your target is £50 profit from a trade in a 5% market, your actual target needs to be £52.63 gross to net £50 after commission. Build commission into your entry/exit price calculations.
- Don't use alternative exchanges to avoid Betfair commission unless the odds are substantially better. Betdaq charges 2% and Smarkets 2%, but liquidity is a fraction of Betfair's. Shallower markets mean wider spreads, worse fills, and more slippage — which can easily cost more than the commission saving. See Betfair vs Betdaq.
Commission vs Bookmaker Margin
A common question: isn't Betfair's 5% commission similar to just using a bookmaker? The answer is emphatically no — and the maths proves it.
A bookmaker builds a 10–15% margin into every market (every set of odds). Every single bet you place contributes to this margin, win or lose. Over time, losing the bookmaker's margin is mathematically unavoidable for most bettors.
Betfair charges 5% only on your net winnings. A net winning bettor pays 5% of their profits. A net losing bettor pays nothing at all. The Exchange is neutral — it earns commission regardless of who wins. This means:
- If you're a profitable bettor, you pay 5% of your profit rather than having 12% of your money eaten by margin on every bet
- If you're a losing bettor, you lose less on the Exchange than you would at a bookmaker (no margin baked in, odds are 5–15% better)
- If you're a trader profiting from price movement, a bookmaker doesn't allow the activity at all
Arsenal to win at a bookmaker: 1.83 (11% margin built in).
Arsenal to win on Betfair Exchange: 1.99 (no margin — market price).
Back £200 on Arsenal. If Arsenal win:
Bookmaker profit: (1.83 − 1) × £200 = £166.
Exchange profit (gross): (1.99 − 1) × £200 = £198. After 5% commission: £188.10.
Betfair beats the bookmaker by £22.10 on this single bet, even after commission. On 100 such bets, that's over £2,200 difference.
For a full comparison, see Exchange vs Sportsbook. Use our calculator to model commission impact on any specific trade.