Transfer Tax Explained: How to Add Tax to Your Solana Token

Transfer tax is one of the most powerful features available through Solana's Token-2022 program. It lets you automatically charge a fee on every token transfer without relying on custom smart contracts.

How Transfer Tax Works

When a transfer tax is enabled:

• Every time tokens are transferred, the fee is calculated
• The fee is withheld from the transferred amount in the recipient's token account
• The withdraw authority can later harvest these withheld fees

For example, with a 5% tax on a 1000 token transfer:

• Sender sends 1000 tokens
• Recipient receives 950 tokens
• 50 tokens are withheld as fees

Setting Up Transfer Tax

In 3doxies, enable Transfer Tax in the token generator:

• Tax Rate: Enter the percentage (e.g., 5 for 5%)
• Max Fee: Optional maximum fee per transfer (0 = unlimited)
• Config Authority: Who can update the tax settings (defaults to your wallet)
• Withdraw Authority: Who can collect accumulated fees (defaults to your wallet)

Important Details

Epoch Delay

Tax rate changes don't take effect immediately. There's a 2-epoch delay (approximately 2 days) before new rates apply. This protects token holders from sudden, unannounced changes.

Collecting Fees

Withheld fees accumulate in individual token accounts. To collect them:

• Go to the Dashboard and select Withdraw Fees
• The tool harvests fees from token accounts to the mint
• Then withdraws them to your wallet

Max Fee

The max fee caps the tax amount per transfer. This prevents disproportionately large fees on whale transfers. Set to 0 for unlimited.

Use Cases

• Revenue generation: Fund development, marketing, or buybacks
• Deflationary mechanics: Burn collected fees to reduce supply
• Liquidity provision: Auto-fund liquidity pools
• Community treasury: Fund DAO or community operations

Best Practices

• Start with a reasonable rate: 1-5% is typical. Extremely high rates discourage trading.
• Set a max fee: Prevents whales from being penalized disproportionately.
• Be transparent: Clearly communicate the tax rate to your community.
• Test on Devnet first: Create a test token and verify the tax mechanics before mainnet launch.