Understanding the 2% GE tax
Jagex added a tax on Grand Exchange sales in 2021. It is 2% of the sale price, applies only to sellers, and has a hard cap that changes the maths on expensive flips.
The basic formula
When you sell an item on the GE, the game subtracts 2% of the sale price before the GP hits your bank. The buyer pays the full price. You receive 98%, rounded down to the nearest GP.
| Sale price | Tax | You receive |
|---|---|---|
| 1,000 | 20 | 980 |
| 500,000 | 10,000 | 490,000 |
| 10,000,000 | 200,000 | 9,800,000 |
| 100,000,000 | 2,000,000 | 98,000,000 |
The 5M cap that changes everything on expensive items
Tax is capped at 5,000,000 GP per item sold. This means the effective tax rate drops sharply once an item sells above 250M. A Twisted bow at 1.4B is not taxed 28M. It is taxed 5M, an effective rate of 0.36%.
| Sale price | Tax (capped) | Effective rate |
|---|---|---|
| 250,000,000 | 5,000,000 | 2.0% |
| 500,000,000 | 5,000,000 | 1.0% |
| 1,000,000,000 | 5,000,000 | 0.5% |
| 1,400,000,000 | 5,000,000 | 0.36% |
For high-value flippers this is significant. A 100M Twisted bow flip paying 2M tax is a different game from a 1.4B flip paying the same 5M tax. Margins on rares look better than they do on consumables once you factor this in.
What is exempt from tax
- Items selling for under 50 GP. Anything below the 50 GP threshold is tax-free, which keeps the bottom of the market liquid.
- Old School Bond. Bonds are tax-exempt. Flipping bonds gives you the full spread.
- A small list of essential items. Jagex maintains a curated exempt list (mostly low-value tools and quest items). The list changes occasionally with game updates.
How tax affects your flip decisions
Always work in margin after tax, not before. A 50k spread on an item priced at 500k is not a 50k flip, it is roughly 40k after tax. On thin margins this is the difference between profit and break-even.
The ROI calculation on most flipping tools already factors tax in. If you do the math yourself, do not skip it.
Practical examples
Cheap stable: Cooked karambwan
Buy 11,000 at 380, sell at 410. Pre-tax margin is 30 per unit. Tax is 2% of 410 rounded down, so 8 GP. After tax you receive 402, leaving a net margin of 22 per unit. Across the full 11,000 buy limit, that is 242k profit per 4-hour cycle.
Mid-tier: Saradomin brew (4)
Buy 2,000 at 8,500, sell at 9,200. Tax on the sell side is 184, leaving 9,016. Net margin is 516 per unit, or roughly 1.03M per cycle.
Expensive: Twisted bow
Buy at 1.38B, sell at 1.40B. Pre-tax margin is 20M. Tax is capped at 5M, so net margin is 15M. With a buy limit of 8 over 4 hours, the theoretical ceiling is 120M every cycle. In reality, fills are slow.
See live margins after tax
GE IQ shows the post-tax margin on every item, not the misleading pre-tax number. The 2% and 5M cap are baked into every score.
Open GE IQ