Topstep: Payout Rules & Caps Explained

Topstep offers competitive payout structures with an 80/90 split and twice-monthly distributions to funded traders. Understanding their payout rules and caps is crucial for maximizing your earnings potential while maintaining compliance with their trading requirements.

Key Facts

Topstep's payout system operates on a tiered structure where traders receive 80% of their first unlimited profits, then 90% of subsequent profits. This means there's no cap on the initial 80% tier - you immediately start earning the higher 90% split after your first payout. Payouts are processed twice monthly, giving traders regular access to their earnings without long waiting periods.

To be eligible for payouts, traders must complete a minimum of 5 trading days and maintain compliance with all account rules, including the end-of-day trailing drawdown limits and daily loss limits. The payout amount is calculated based on closed profits above your starting balance, and unrealized profits don't count toward payout calculations.

Let's look at a concrete example: If you're trading a $100,000 Topstep account and generate $8,000 in closed profits, your first payout would be $6,400 (80% of $8,000). If you then generate another $5,000 in profits, your next payout would be $4,500 (90% of $5,000). The higher percentage applies to all subsequent payouts, making the earning potential increasingly attractive.

For swing traders and position traders, this system works particularly well since they can hold overnight positions (allowed on funded accounts) and capture larger moves over several days. However, scalpers and day traders who generate consistent smaller profits also benefit from the twice-monthly frequency, as they don't need to wait long periods to access their earnings.

The most common mistake traders make is not understanding that only closed, realized profits count toward payouts. Many traders see their account balance increase due to open positions and assume they can immediately request a payout, only to discover that unrealized gains don't qualify. This is particularly problematic for swing traders holding positions across payout periods.

Another frequent error is violating account rules while having substantial unrealized profits, thinking they can close positions and request a payout. Once any rule is violated, the account is typically terminated regardless of profit levels. Traders must maintain strict risk management throughout their entire trading period, not just when starting out.