Stripe Connect for agencies in 2026: setup, charges and tax

Most small agencies should use Stripe Connect with Express accounts and the "separate charges and transfers" model. It lets one client payment land on your platform account and then split across as many contractors as the job needs. The tax setup and the W-8 and W-9 forms are what people usually get wrong.

Pick Express accounts unless you have a reason not to

Stripe Connect offers three account types, and for a small agency Express is the practical one. They are described on Stripe's connected accounts page, which now steers new builds toward "controller properties" instead of fixed labels, but the three labels still describe the trade-off well.

Standard accounts give each contractor a full Stripe account of their own. That suits independent businesses that already use Stripe and want their own dashboard. For a five-person collective it is more than you need, and you will spend time explaining Stripe to people who only want to see a payout.

Express accounts use Stripe-hosted onboarding and a simplified dashboard. Stripe handles identity checks, and your contractors can see what they were paid without managing a Stripe relationship. This is the fit for most agencies.

Custom accounts put the whole experience on you: your own dashboard, notifications and support. It is a build project, and it only pays off for marketplaces with hundreds of sellers.

If you are unsure, start with Express. You can move to a different setup later, but it is easier to start simple than to unwind a custom build.

Use separate charges and transfers when one invoice pays many people

Separate charges and transfers is the charge model for a one-to-many split. Stripe's charge documentation describes three patterns, and only one fits an agency.

Direct charges put the payment on the connected account. That works when the contractor is the seller, as on a store builder. Destination charges put the payment on your platform and send it to one connected account, which fits a marketplace with one seller per order. Separate charges and transfers takes one charge on your platform and lets you send transfers to as many connected accounts as you want.

Take a $30,000 client invoice. $12,000 goes to a designer, $9,000 to a developer, $6,000 to an editor, and you keep $3,000 as agency margin. Only the third model handles that cleanly, because the charge exists once and the transfers are separate records you control.

The common mistake is picking direct charges because the first test looks easier, then reconciling by hand afterwards. That work grows with every contractor you add.

Know where the fees come from

Connect fees sit on top of normal card processing, and the numbers depend on your country, so read your own page. Stripe's Connect pricing page lists a per-payout fee (a percentage plus a fixed amount) and a monthly fee for each connected account that received a payout in that month. The version of the page that loads for a UAE visitor, for example, quotes the fees in dirhams, not dollars.

There are four layers to count:

1. Standard card processing on the client payment.
2. A fee for each payout to a connected account.
3. A monthly fee for each active connected account, for platforms that handle their own pricing.
4. Your own cut, the platform margin, which you set through the application fees API.

The monthly fee only matters once you have many active accounts. For an agency with a handful of regular contractors, processing is the big number and the Connect layers are small. Run one real invoice through the calculator before you promise a contractor a rate, because rounding on payouts adds up when you have six of them.

Set tax behaviour on purpose

Stripe changed how platforms handle tax on April 29, 2026, so check that your setting is deliberate. According to Stripe's documentation on Stripe Tax for platforms, transactions are now processed according to your Stripe Tax settings, instead of defaulting to tax-excluded pricing.

For an agency, the practical effect is that the same invoice can price differently before and after that date if you never made a choice. Decide whether each invoice is tax-inclusive or tax-exclusive, and set it explicitly.

The Stripe Tax and Connect page explains who carries the obligation, your platform or each connected account, and how threshold tracking works for connected accounts approaching a registration limit. It covers sales tax and VAT in several regions, including the EU, UK and UAE.

This is a settings pass of an hour or two. The cost of skipping it is finding out a quarter later that you crossed a registration threshold. Check the details with your accountant, because which entity owes tax depends on how you structure the contractor relationship.

Collect W-8 and W-9 forms before the first payout

Collect the tax form before you send the first transfer, not in January. Stripe's tax reporting overview explains the rules for 1099 reporting, and the W-8 and W-9 onboarding flow shows how Stripe collects the forms (the page marks it as a private preview, so confirm access first).

The usual pattern in the US is this:

• A US contractor completes a W-9, and you may need to file a 1099-NEC at year end.
• A foreign individual completes a W-8BEN. In most cases no 1099 follows, but the form is still your record.
• A foreign company completes a W-8BEN-E.

Your own threshold for filing a 1099-NEC matters here, and it has changed for 2026. Our post on the 1099-NEC threshold change walks through the new number. Tax rules differ by country and by contractor status, so check it with your accountant or lawyer before you set your process.

Use the 2026 additions only if they fit

Two items from Stripe Sessions 2026 are relevant to agencies, and neither is required.

The first is issuing virtual cards for contractors. A March 2026 changelog entry added lifecycle controls such as limits per card, so you can hand a contractor a card for one tool subscription and cap what it can spend.

The second is expanded tax automation across more jurisdictions, which saves a quarterly chore when your contractors live in different countries.

If you are a non-US founder who cannot open a Connect platform account directly, Stripe Atlas is the route Stripe offers for incorporating a US company. Plenty of founders use it, so the pattern is well worn.

How Delivvo handles the client side of an agency

Delivvo covers everything that happens between you and the client, and leaves contractor payouts where they belong, in Stripe Connect. It does not split payments or send transfers. What it does is make the invoice that triggers your Connect flow arrive paid, on time and with a paper trail.

Here is how that works for an agency:

1. A client fills in your inquiry form, and the lead lands on the lead board with the budget and the files they attached.
2. You build a quote from packages and add-ons. With the one-page close on Pro, the client picks, signs the contract and pays the deposit on one link.
3. Delivvo creates the client, the project, the contract, the invoice and the payment schedule from that single step, with sequential invoice numbers in your format.
4. The client pays through your own gateway. If that is your Stripe platform account, the money lands there, and your Connect transfers to contractors run exactly as you set them up. Delivvo takes 0% and is never the merchant of record.
5. Contractors work from the team workspace as tasks with a brief, a due date and files. The client sees only the approved file under your business name, never the contractor's raw drafts.

One detail you will not find on a payments-only page: every invoice, contract and quote carries a verification code. A client, or a client's accountant, can paste it into the verify page and see the issuer, number, dates and amount. When you are billing $30,000 and splitting it five ways, that record matters on the day someone asks what was agreed.

You can read more on the payments page and the team workspace.

For the wider picture, see how payments work and the CRM for service businesses.

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