Betfair Exchange Commission: A Practical Guide for Smarter Traders

Betfair commission is one of the most overlooked but important factors in exchange betting. Even a small percentage can turn a profitable trade into a losing one if you ignore it. This guide explains how Betfair commission really works and how to include it in your calculations using the tools on Smarter Trades.

What Is Betfair Exchange Commission?

Betfair charges a fee on your net winnings in a market. Unlike a bookmaker margin built into odds, exchange commission is applied only when you win. If you lose a bet, you do not pay commission. This structure is important because it affects the true return on every profitable trade.

How Commission Affects Your Real Profit

Suppose you win £20 on a trade and your commission rate is 5%. You only keep:

£20 − (5% of £20) = £20 − £1 = £19

That £1 difference might seem small, but over hundreds or thousands of trades, commission adds up quickly. This is why every calculator on Smarter Trades includes a commission field.

Commission Formula

Betfair's commission calculation is:

commission = marketNetWinnings × commissionRate

Where:

marketNetWinnings = your total profit in that market after all bets settle
commissionRate = typically 2%–5%, depending on location and Betfair’s rules

How Commission Affects Different Bet Types

Back Bets

On a back bet, if your selection wins, commission applies to the winnings (not the total return). Example: Back £10 at odds of 3.0 → winnings = £20 → commission (5%) = £1.

Lay Bets

On lay bets, you only pay commission when the selection loses (because you win the backer’s stake). Your liability has no commission applied — only net winnings.

Hedged Positions

When you hedge or green up, Betfair calculates net winnings across the entire market, not each individual bet. This means:

Your final commission may differ from your calculator estimates
Commission applies only to the profitable side of the market
Losses in the same market reduce commission owed

Using the Smarter Trades Tools With Commission

To help traders calculate real-world profits, Smarter Trades includes a commission input in the:

Dutching Calculator
Lay Liability Calculator
Back/Lay Hedge Calculator
Expected Value (EV) Calculator
Kelly Staking Calculator
Matched Betting Calculator

Each tool adjusts net outcomes to reflect commission so you can make decisions based on accurate, after-fee results.

Example: Commission in a Dutching Scenario

Imagine you dutch three runners for a level profit of £18 before commission. With a 5% commission rate:

Commission = £18 × 0.05 = £0.90  
Net Profit = £18 − £0.90 = £17.10

This might seem like a small difference, but repeated many times it becomes significant.

Example: Commission in a Lay Bet

You lay a selection for £15 at odds of 4.0:

If it loses → you win £15 (before fees)
Commission at 5% = £0.75
Net profit = £14.25

The liability does not incur commission; only your net win does.

Break-Even Odds After Commission

Commission changes the break-even point for many strategies. For example, in EV calculations, the edge required is higher because your real profit is lower after fees.

The Smarter Trades EV calculator automatically adjusts for this so you can see your true break-even probability.

Frequently Asked Questions

Does Betfair charge commission on losing bets?

No. Commission is charged only on net winnings in a market.

Do I pay commission on liability?

No. Liability is potential loss, not profit. Commission applies only if you win.

Is the commission rate always 5%?

No. Betfair adjusts commission based on your location and betting activity. Many traders pay around 2%, but new accounts and some regions default to 5%.

Does commission change EV?

Yes. EV should always be calculated after commission. A bet that looks positive EV before fees may be negative EV once commission is applied.

Where can I use a commission-aware calculator?

You can find all calculators here: Smarter Trades Main Tools.