Gross, commissionable pricing is the classic agency model for tour operator packages, cruises, travel insurance and many hotels. The agent sells at the supplier’s price and earns commission rather than adding a mark-up.

An example

An agent sells a £2,000 package on an agreed 10% commission. The customer pays £2,000 and the agent earns £200, paid in the way and at the time the supplier’s agency agreement sets out. HMRC notes that tour operators commonly use self-billing, raising the agent’s commission invoice on the agent’s behalf.

Watch out for

• “Gross” and “net” are used inconsistently across the trade, so check how each supplier uses them.

• Which parts of a booking are commissionable is set by each supplier’s agreement.

• Many scheduled airline fares no longer pay commission to UK agents, so agents often charge a service fee instead. Since 6 April 2025, any fee the customer must pay has to be included in the headline price, and on ATOL bookings an agent’s own fee is shown separately on the receipt as not ATOL protected.