What is a split payment?
A split payment is one bill or invoice paid in two or more parts, either with several payment methods, by several payers, or as installments over time. In some countries the term also means a tax rule where the VAT part of an invoice is paid separately from the net amount. Which meaning applies depends on where you see it.
For a business that sends invoices, split payments usually show up as part payments against one invoice. Each part must be recorded and matched to the right invoice, and the invoice stays open until the parts add up to the total.
One bill, several parts.The invoice total is paid in pieces instead of in one payment.
Three common meanings.Several payment methods, installments over time, or a VAT split payment rule.
The invoice stays open.It is only fully paid when the parts add up to the amount due.
The main types of split payment
| Type | What happens | Where you see it |
|---|---|---|
| Split tender | One bill paid with two or more methods, for example part card and part gift card | Retail and point of sale |
| Split between payers | Two or more people or companies each pay a share of one bill | Shared costs, joint ventures, group bookings |
| Installments | One invoice paid in several amounts on agreed dates | B2B invoices, payment plans, large orders |
| Marketplace split | One customer payment shared out between the platform and the sellers | Marketplaces and platforms |
| VAT split payment | The VAT part of an invoice goes to a separate account or straight to the tax office | Poland, Italy |
Split payments on B2B invoices
In accounts receivable, a split payment is most often an agreed installment schedule or a customer paying what they can now and the rest later. Agreeing the split up front is better than receiving an unexplained short payment, because both sides know the dates and amounts. Record each part as a partial payment against the invoice, not as a new invoice.
The work is in the matching. A payment that covers only part of an invoice, or parts of several invoices, needs to be applied correctly or your aging report goes wrong. Partial payment reconciliation covers how to do that.
VAT split payment mechanisms
Some countries use split payment as an anti-fraud rule: the buyer pays the VAT part of the invoice separately from the net amount, so the supplier cannot keep the tax. Two examples:
- Poland has a mandatory split payment mechanism (MPP). It applies when an invoice is over PLN 15,000 gross, at least one line is a good or service listed in Annex 15 to the VAT Act, and both parties are VAT taxpayers. The VAT is paid into the supplier's separate VAT account (Polish Ministry of Finance).
- Italy uses scissione dei pagamenti, where public administrations pay the VAT on a supplier's invoice to the State instead of to the supplier, under Article 17-ter of DPR 633/72 (Agenzia delle Entrate).
If you invoice customers in these countries, check whether your invoices fall under the rule, because the invoice wording and the way you receive the VAT both change.
What does split payment mean?
Is a split payment the same as a partial payment?
How do I record a split payment on an invoice?
What is split tender?
What is the split payment mechanism in Poland?
Splitting an invoice into installments
If customers ask to pay a large invoice in parts, a written schedule protects both sides. Paidnice can turn one unpaid invoice in Xero or QuickBooks Online into a payment plan on the Pro plan and above, and moves the invoice due date to each next installment. With Stripe connected, you can also accept part payments through Stripe.
App of the Year