Process Server Taxes and Business Expenses in California

Process server taxes in California depend on how the business is structured, whether the server is an employee or self-employed, how much net profit the business earns, and which expenses are properly documented. A registered process server who operates as a sole proprietor may have federal income tax, self-employment tax, California income tax, and estimated payment responsibilities.

The tax calculation is not based only on the total amount clients pay. A self-employed server generally reports business income and subtracts qualifying business expenses to determine net profit. That means mileage records, parking receipts, software invoices, bond costs, insurance, printing, postage, and other operating records can materially affect the final result.

In my experience operating Process Server San Diego Professional and building ProofSer, the most useful tax system is not a folder assembled in April. It is a weekly process that connects assignments, payments, mileage, receipts, invoices, and business accounts while the information is still clear.

Tax disclaimer: This article provides general educational information and is not tax, legal, accounting, employment, or investment advice. Tax treatment depends on the taxpayer, entity, accounting method, vehicle use, records, elections, and current law. Consult a qualified tax professional about your business and verify current IRS, California FTB, EDD, and local requirements.

The Short Answer

A self-employed California process server generally reports income from process serving and deducts qualifying ordinary and necessary business expenses. A sole proprietor commonly reports the activity on Schedule C with the federal individual return.

Net earnings from self-employment of $400 or more generally trigger Schedule SE and self-employment tax. The stated federal self-employment tax rate is 15.3 percent, consisting of Social Security and Medicare components, although calculations, wage limits, and additional Medicare tax rules can affect the actual result.

California sole proprietors generally report business income or loss through their individual California return and may need Form 540-ES estimated payments. A California LLC has separate filing and payment requirements, including the state’s $800 annual LLC tax in most active years.

This table is an overview. Entity elections, partnerships, S corporations, employees, nonresidents, and multi-state businesses require additional analysis.

First Determine Whether the Server Is an Employee or Self-Employed

Tax planning starts with the correct working relationship. A process server does not become self-employed merely because a company pays by assignment or issues Form 1099-NEC.

California uses its own worker-classification rules, including the ABC test and statutory exceptions. Federal tax classification considers behavioral control, financial control, and the relationship between the parties.

An employee generally receives Form W-2. The employer handles payroll withholding and the employer share of payroll taxes. An employee may also have rights involving wages, expense reimbursement, workers’ compensation, and other employment protections.

A genuine independent process serving business generally invoices clients, pays its own operating costs, maintains business records, and reports its profit or loss. It may receive Forms 1099, but all taxable business income generally must be reported even when no information form arrives.

Review our detailed guide to the California process server independent contractor classification before treating a field server as a separate business.

Federal Taxes for a Self-Employed Process Server

A sole proprietor is not taxed on gross deposits without considering qualifying expenses. Schedule C generally calculates the business profit or loss by reporting income and subtracting allowable business expenses.

The resulting net profit can affect federal income tax and self-employment tax. It can also affect credits, deductions, retirement contributions, health insurance treatment, and other parts of the individual return.

Federal Income Tax

Federal income tax is calculated using the taxpayer’s total situation. Process serving profit may be combined with wages, investment income, a spouse’s income, and other reportable amounts.

There is no single federal income tax percentage that applies to every process server. Filing status, taxable income, deductions, credits, dependents, and other factors change the result.

Self-Employment Tax

Self-employment tax is primarily the Social Security and Medicare tax for people who work for themselves. The IRS states that the rate is 15.3 percent, consisting of 12.4 percent for Social Security and 2.9 percent for Medicare.

The calculation is not simply 15.3 percent of every dollar deposited. Schedule SE applies statutory calculation rules, the Social Security portion has an annual earnings limit, and an additional Medicare tax may apply above specific income thresholds.

The IRS also permits a deduction for the employer-equivalent portion of self-employment tax when calculating adjusted gross income. That deduction affects income tax, not the amount of self-employment tax itself.

Schedule C

Schedule C is commonly used by a sole proprietor or single-member LLC treated as a disregarded entity for federal income tax purposes. It reports gross receipts and expense categories such as advertising, insurance, legal fees, supplies, vehicle costs, contract labor, depreciation, and other business expenses.

A single-member LLC does not automatically file a completely separate federal income tax return. Unless it elects a different federal classification, the activity is commonly reported through the owner’s return. Employment taxes and certain other obligations can still require the LLC’s own EIN and filings.

California Income Tax for Process Servers

A California sole proprietorship operates as the individual for tax purposes. The California Franchise Tax Board states that the owner reports business income or loss on the individual California income tax return.

A full-year California resident generally reports taxable income under California rules. A nonresident or part-year resident may still need to report California-source income from services or business activity in the state.

California and federal taxable income do not always match. California may conform to some federal provisions and differ from others. Do not assume that every federal deduction, election, or limitation produces the same state result.

A tax professional should review the California return when the server:

• Lives outside California but performs services inside the state
• Moves into or out of California during the year
• Operates in several states
• Uses an LLC, partnership, or corporation
• Has employees or pays subcontractors
• Claims substantial vehicle or home-office expenses
• Has business losses or major equipment purchases
• Receives income through multiple payment platforms

California LLC Annual Tax and Additional Fee

Forming an LLC changes more than the business name. The California Franchise Tax Board states that every LLC organized or doing business in California generally must pay an $800 annual tax until the LLC is properly canceled.

The temporary first-year exemption applied only to tax years beginning from 2021 through 2023. A process server forming a California LLC in 2026 should not assume that the first year is automatically free.

The first annual tax is generally due by the fifteenth day of the fourth month from the formation date. Subsequent annual payments are generally due by the fifteenth day of the fourth month of the taxable year.

An additional California LLC fee applies when total California income reaches more than $250,000. The FTB publishes a tiered schedule and requires the estimated fee through FTB 3536.

The LLC may also need Form 568, a Statement of Information with the California Secretary of State, local business registrations, an FBN filing, and other compliance items. These are different obligations with different agencies and due dates.

Before choosing an entity, compare administrative cost, liability protection, tax treatment, payroll plans, insurance, and expected profit. Our guide on starting a process serving business in California explains the larger setup process.

Federal and California Estimated Tax Payments

Self-employed income usually arrives without payroll withholding. Federal and California systems generally expect tax to be paid during the year rather than entirely after the annual return is prepared.

Federal Estimated Payments

The IRS generally requires estimated payments from sole proprietors, partners, and S corporation shareholders who expect to owe at least $1,000 when the return is filed after subtracting withholding and refundable credits.

Form 1040-ES contains the federal worksheet and payment schedule. A server with both a W-2 job and process serving income may be able to increase payroll withholding instead of making some separate estimated payments.

Income can change during the year. A server may start slowly and receive several large law-firm accounts later. Recalculating the estimate can be more accurate than repeating a number based on the first month.

California Estimated Payments

For 2026, California generally requires estimated payments when an individual expects to owe at least $500 after withholding and credits, or $250 when married or registered domestic partners filing separately, and the other published conditions are met.

California does not divide the required annual payment into four equal installments. The FTB’s 2026 schedule uses:

Higher-income taxpayers and people with uneven income can have different calculation issues. Use the current Form 540-ES instructions rather than assuming federal percentages and dates apply to California.

Create a Tax Reserve

A practical process server can transfer part of every collected invoice into a separate tax savings account. The percentage should be selected with a tax professional because gross revenue is not the same as net profit and household tax situations differ.

The reserve is not itself a tax deduction. It is a cash-flow system that prevents money intended for taxes from being spent on routine operations.

What Business Expenses Can a Process Server Deduct?

The IRS standard is that a deductible business expense should be ordinary and necessary. Ordinary means common and accepted in the trade or business. Necessary means helpful and appropriate for the business.

An expense does not need to be absolutely indispensable. It must have a legitimate business connection, and personal expenses must remain separate.

Process Server Registration and Bond

County registration fees, identification photos, fingerprinting costs, and the process server bond premium may be business expenses when paid for an active process serving business. The tax treatment of a refundable cash deposit can differ from a bond premium or nonrefundable filing fee.

Keep the county receipt, bond invoice, Live Scan receipt, and registration confirmation. Do not record a refundable asset as though it were automatically a current expense without professional guidance.

Insurance

Business-related general liability, errors and omissions, cyber coverage, workers’ compensation, and qualifying commercial or business-use vehicle premiums may affect deductible expenses.

Personal coverage and business coverage should not be mixed without allocation. The deduction depends on the policy, business use, entity, and who paid the premium.

Case-Management Software and Technology

Process serving platforms, route planning, secure cloud storage, electronic signature systems, accounting tools, payment processors, website hosting, domain names, email services, and cybersecurity tools may qualify when used for the business.

If a subscription has both personal and business use, document a reasonable allocation rather than claiming the entire cost automatically.

Printing, Copies, Postage, and Mailing

Paper, toner, printer maintenance, copies, envelopes, labels, certified mailing, and ordinary postage can be substantial for substituted service, notices, proofs, and client packages.

Connect postage to a case number or client whenever possible. This makes reimbursement and tax categorization easier.

Phone and Internet

A separate business phone line is easier to document than a mixed personal plan. When one device serves both purposes, the business should use a reasonable method to determine the business portion.

Mobile data supports navigation, client communication, secure assignment access, timestamps, and field reports. Keep bills and document how the percentage was calculated.

Advertising and Client Development

Website development, hosting, domain renewal, business cards, directory listings, search advertising, networking fees, sponsorships, and appropriate promotional expenses may qualify as advertising or marketing costs.

Entertainment and personal social activity should not be moved into advertising merely because a potential client was present. Ask a tax professional how meal, event, gift, and entertainment restrictions apply.

Legal, Accounting, and Professional Services

Bookkeeping, tax preparation related to the business, legal review, payroll service, registered agent service, and business consulting may be deductible subject to the applicable rules.

Keep invoices that identify the service. A mixed invoice involving personal and business matters may require allocation.

Bank and Payment Processing Fees

Monthly business bank charges, wire fees, merchant processing, card fees, invoicing platform fees, and qualifying payment-service charges may be business expenses.

Record the gross client payment as income and the processor charge as an expense when required by the accounting method. Reporting only the net bank deposit can understate both revenue and fees.

Education and Professional Resources

Continuing education, professional association dues, legal reference subscriptions, and training that maintains or improves skills in an existing business may qualify.

Education that prepares a person for a completely new trade or business may receive different treatment. The purpose and timing matter.

Protective and Field Equipment

A flashlight, secure document case, portable scanner, dash camera, body-worn safety device, weather protection, power bank, and other field equipment may have business use.

Ordinary clothing suitable for street wear is generally not transformed into a business deduction because it is worn during service attempts. Specialized protective equipment and required uniforms involve a different analysis.

Contract Labor and Payroll

Payments to employees or legitimate independent businesses may be deductible business costs, but they create separate reporting and compliance duties.

Do not label an employee as contract labor to simplify taxes. Classification should be resolved before choosing payroll or Form 1099 reporting.

Mileage and Vehicle Expenses for Process Servers

Vehicle costs are often one of the largest process serving expenses. A server may drive between a home office, law firm, courthouse, residential address, workplace, mailing location, and another attempt on the same day.

The IRS generally provides two approaches for eligible business vehicle use: the standard mileage method and the actual expense method. Eligibility and election rules apply, especially in the first year a vehicle is used for business.

2026 Standard Mileage Rates

The IRS changed the business mileage rate during 2026. A process server using the standard mileage method must apply the rate that corresponds to the date of the trip.

A year-end total without dates is not enough to apply two rates accurately. Keep trip-level records throughout the year.

What a Mileage Log Should Include

• Date of the trip
• Starting point and destination
• Business purpose
• Assignment, client, or case reference
• Business miles driven
• Parking and toll charges
• Beginning and ending annual odometer readings when appropriate

A case-management timestamp can support the log, but it may not record the full route or distinguish business and personal miles. Use a mileage system designed to create a complete record.

Actual Vehicle Expenses

Under the actual expense method, potentially relevant costs include fuel, repairs, maintenance, tires, insurance, registration, lease payments, and depreciation. Only the business portion is considered.

If a vehicle is used 70 percent for business and 30 percent personally, the entire vehicle budget is not automatically deductible. Total mileage and business mileage help establish the allocation.

Parking and Tolls

Business parking and tolls can generally be tracked separately. Downtown San Diego parking, courthouse garages, bridge tolls, and access fees should be connected to a business trip.

Parking tickets, traffic fines, and penalties are not treated like ordinary parking charges. Do not place them in the same category.

Commuting Versus Business Travel

Ordinary travel between a residence and a regular workplace is generally commuting, not deductible business mileage. Travel from one business location to another, visiting clients, and certain trips from a qualifying home office can receive different treatment.

A magnetic sign, business call, or legal packet in the vehicle does not automatically convert a personal or commuting trip into business mileage.

Home-office qualification can affect where the first business trip begins. Because process servers work from many locations, a tax professional should review the actual pattern before the server classifies every mile after leaving home as business travel.

Home Office, Computers, Printers, and Equipment

Many independent process servers handle intake, printing, route planning, reports, billing, and Proof of Service preparation from home. A home office deduction may be available when the applicable requirements are satisfied.

The IRS generally requires exclusive and regular business use. A dining table used for client files during the day and family meals at night normally does not satisfy exclusive use.

A home office may qualify as the principal place of business when it is used exclusively and regularly for administrative or management activities and the business has no other fixed location where substantial administrative or management work occurs.

The simplified federal method generally uses $5 per square foot for up to 300 square feet. The actual method allocates qualifying home expenses. Limitations and California differences should be reviewed before selecting a method.

Equipment Purchases

Laptops, printers, scanners, cameras, phones, office furniture, and other equipment may be deducted currently, depreciated, or treated under another election depending on cost, use, and current tax rules.

Keep the purchase invoice, payment record, placed-in-service date, serial number, and business-use percentage. A credit-card statement alone may not explain what was purchased.

A Practical Recordkeeping System for Process Servers

A good record system should answer four questions:

1. How much income did the business earn?
2. What business expense was paid?
3. What document supports the amount and purpose?
4. Which client, assignment, vehicle trip, or business activity does it relate to?

Use a Separate Business Bank Account

A separate account reduces personal and business mixing. It also makes monthly reconciliation and year-end reporting easier.

A sole proprietor may not be legally separate from the owner in the same way as a corporation, but separate banking is still a valuable operational practice. An LLC or corporation should follow entity-specific separation requirements.

Record Gross Revenue

Track every invoice, payment, refund, processing fee, and unpaid balance. Payments received through checks, ACH, cards, cash, peer-to-peer platforms, or marketplaces do not disappear from reporting merely because a Form 1099 was not issued.

Reconcile client records with bank deposits and payment processor reports each month. Differences should be investigated while the transactions are recent.

Digitize Receipts

A receipt image should be readable and connected to the transaction. Add the business purpose if it is not obvious.

Use consistent filenames or accounting attachments. For example, include the date, vendor, amount, and expense category without placing confidential case information in an insecure location.

Protect Client Information

Tax records can include invoices, addresses, legal documents, client names, and payment information. Store them securely and limit access.

A bookkeeping folder should not become an unsecured copy of every service packet. Retain only the business documentation necessary for accounting, tax, legal, and client obligations.

Complete a Monthly Close

At the end of each month:

• Reconcile bank and card accounts
• Match invoices to payments
• Review unpaid accounts receivable
• Categorize expenses
• Check mileage completeness
• Save major receipts and contracts
• Review tax reserve balances
• Estimate year-to-date profit
• Identify contractor or employee payments
• Back up required records securely

This routine also improves pricing. If the records show that mileage, parking, and failed attempts consume most of a service fee, the rate or service area may need adjustment. See our guide to pricing process serving services in California.

Forms W-9 and 1099-NEC

A law firm or process serving agency may ask an independent provider to complete Form W-9. The form supplies the provider’s legal name, tax classification, address, and taxpayer identification number.

An EIN can reduce the need for a sole proprietor to provide a Social Security number on routine business forms. The IRS issues EINs directly at no charge. Third-party websites may charge for a service the IRS provides for free.

Receiving Form 1099-NEC

A process server may receive Form 1099-NEC for nonemployee compensation. The form is an information return, not the complete accounting record.

Reportable income is not limited to the forms received. A client may have paid less than the reporting threshold, may fall under an exception, or may fail to issue a form. The server must still maintain complete income records.

Issuing Form 1099-NEC

A process serving business that pays nonemployees may have its own Form 1099 reporting duties. For payments made in 2026, the IRS states that the general reporting threshold for covered Form 1099-NEC payments is $2,000. Payments before 2026 used the prior $600 threshold, and later years may use an inflation-adjusted amount.

Entity exceptions, backup withholding, attorney payments, payment-card rules, and other details can change the reporting result. Obtain Form W-9 before payment and review the current form instructions with a tax professional.

If the business files ten or more aggregated information returns, federal electronic filing rules may apply.

Startup Costs Versus Current Operating Expenses

Not every cost paid before the first assignment is treated exactly like an ordinary operating expense paid after the business begins.

Research, formation, initial legal work, pre-opening advertising, equipment, and training can involve startup, organizational, capital, or current expense rules. The date the business becomes active matters.

Keep pre-launch expenses in a separate category until the tax preparer determines the correct treatment. Do not discard them because the first client had not yet paid.

Our California process server startup cost guide provides a broader planning checklist for registration, bond, equipment, insurance, software, and marketing.

Practical Process Server Tax Examples

Example 1: Sole Proprietor With a Personal Vehicle

A registered server receives payments from several law firms and process serving agencies. The server uses a personal vehicle for business and personal trips, maintains a dated mileage log, pays parking, uses case-management software, and works from a qualifying home office.

The server generally reports business income and qualifying expenses on Schedule C. Vehicle expenses require a valid method and business-use records. The server also reviews federal and California estimated payment requirements.

Example 2: Deposits Do Not Match the Forms 1099

A server receives three Forms 1099-NEC totaling $80,000 but collected $92,000 from all clients. Smaller clients and direct customers account for the difference.

The accounting records should report the full business income, subject to the applicable accounting method, rather than only the total shown on information returns.

Example 3: Payment Processor Deducts Fees

A client pays a $150 invoice by card. The processor deposits $145.50 after fees.

The books may need to show $150 of gross revenue and $4.50 of processing expense rather than treating $145.50 as the entire sale. The exact entry depends on the accounting system and method.

Example 4: Mixed Business and Personal Phone

A server uses one phone for family calls, navigation, assignment updates, and client communication.

The full phone bill is not automatically a business expense. The server should document a reasonable business allocation or consider a separate business line.

Example 5: California LLC With No Assignments

A process server forms an LLC but receives no assignments for several months.

The absence of revenue does not automatically eliminate the California $800 annual LLC tax. The obligation generally continues while the LLC remains active or doing business until proper cancellation.

Example 6: Mileage Spans Both 2026 Rate Periods

A server drives 5,000 qualifying business miles from January through June and 6,000 qualifying miles from July through December.

If eligible for the standard mileage method, the first period is calculated at 72.5 cents per mile and the second period at 76 cents per mile. The log must retain the dates and business purpose rather than only an 11,000-mile annual total.

Common Tax Mistakes Process Servers Should Avoid

Reporting Only Forms 1099

Forms 1099 are not a substitute for complete income records. Direct payments and amounts below reporting thresholds can still be taxable.

Claiming Every Mile After Leaving Home

Commuting and personal travel do not become business mileage because the driver is registered as a process server. The route and business purpose matter.

Using One Mileage Rate for All of 2026

The 2026 federal business mileage rate changed on July 1. Using one annual rate can create an inaccurate deduction.

Mixing Client Money and Personal Spending

Mixed accounts make it harder to identify profit, deductible expenses, owner draws, refunds, and taxable deposits.

Treating the LLC Tax as Optional

California’s annual LLC tax generally continues until the entity is properly canceled. Stopping assignments or closing a website does not cancel the LLC.

Deducting Reimbursed Costs Twice

If a client reimburses parking, postage, or another cost, the business should record both the reimbursement and expense correctly. It should not claim a duplicate tax benefit.

Saving Credit-Card Statements Without Receipts

A statement proves that money was paid but may not show what was purchased or why it was business-related.

Waiting Until Tax Season

Reconstructing thousands of miles and dozens of attempts months later produces weak records and missed expenses. Weekly updates are faster and more reliable.

San Diego Tax and Expense Considerations

San Diego process serving routes can involve Downtown parking, coastal traffic, North County distances, East County travel, gated communities, military facilities, courthouses, and repeated attempts at the same address.

These conditions create real costs. The business should track mileage, parking, tolls, printing, mailing, and time by assignment so rates reflect the actual service area.

Local business requirements can depend on where the business is based and where it operates. A county process server registration is not the same as a city business tax certificate, fictitious business name filing, entity registration, or tax account.

A process server may work from a City of San Diego address while serving assignments throughout the county. Another provider may be based in Chula Vista, Oceanside, Escondido, or an unincorporated area. Each business should verify the requirements for its actual location.

Accurate expense records also improve client quotes. A routine serve near an existing route has a different cost from an emergency attempt that requires a dedicated trip across the county.

Year-Round Tax Checklist

Every Assignment

• Connect the assignment to the client and invoice
• Record service-related mileage
• Save parking, toll, postage, and printing receipts
• Record reimbursable expenses separately

Every Week

• Review uncategorized transactions
• Upload missing receipts
• Confirm mileage entries
• Invoice completed assignments
• Transfer the planned tax reserve

Every Month

• Reconcile all business accounts
• Review profit and loss
• Compare actual costs with pricing
• Review contractor and payroll payments
• Back up accounting records

Every Quarter

• Recalculate federal and California estimates
• Confirm payment dates and amounts
• Review year-to-date vehicle use
• Send records to the bookkeeper or tax professional
• Review whether the entity and payroll structure still fit

At Year End

• Reconcile annual gross receipts
• Confirm Forms W-9 for reportable payees
• Prepare Forms 1099 and W-2 when required
• Record annual odometer readings
• Inventory business equipment
• Review accounts receivable and refunds
• Organize LLC, registration, bond, and insurance documents

Frequently Asked Questions

Do process servers pay self-employment tax?

A self-employed process server generally pays self-employment tax when net earnings from self-employment reach $400. Employees generally pay Social Security and Medicare taxes through payroll withholding instead.

What is the self-employment tax rate?

The IRS states that the self-employment tax rate is 15.3 percent, consisting of Social Security and Medicare components. Wage limits, calculation rules, and additional Medicare tax may affect the final amount.

Can a process server deduct mileage?

Qualifying business vehicle use may be deductible through the standard mileage or actual expense method. Personal and commuting miles are not automatically deductible, and a contemporaneous business mileage log is important.

What is the process server mileage rate for 2026?

The federal business mileage rate is 72.5 cents per mile for January 1 through June 30, 2026, and 76 cents per mile for July 1 through December 31, 2026.

Can parking and tolls be deducted?

Parking and tolls connected to qualifying business travel may be deductible. Keep the receipt and identify the business purpose. Tickets and traffic penalties are different from ordinary parking charges.

Can a process server deduct registration and bond costs?

Business registration fees and bond premiums may qualify when connected to an active process serving business. A refundable cash bond deposit may receive different treatment, so keep the documentation and ask a tax professional.

Does a California process server LLC pay $800?

California generally requires an LLC organized or doing business in the state to pay the $800 annual tax until properly canceled. Additional fees can apply when California income exceeds published thresholds.

Are client payments taxable if no Form 1099 is received?

Yes. Taxable business income is not limited to amounts reported on Forms 1099. The server should maintain complete records of all payments.

What is the 2026 Form 1099-NEC threshold?

For covered payments made in 2026, the IRS states a general threshold of $2,000. Exceptions and special rules may apply, and the threshold may be inflation-adjusted after 2026.

Does an EIN cost money?

No. The IRS provides EINs directly at no charge. A third-party filing service may charge its own fee, but payment is not required to obtain an EIN from the IRS.

Can a process server deduct a home office?

A qualifying self-employed process server may be able to deduct a home office used exclusively and regularly for business under the applicable rules. A multipurpose room or shared dining table may fail the exclusive-use requirement.

Should a process server form an LLC for tax deductions?

A sole proprietor can claim qualifying business expenses without an LLC. Entity choice should consider liability, administration, annual California costs, payroll plans, ownership, and tax treatment rather than deductions alone.

How long should tax records be kept?

Retention depends on the record, return, asset, employment obligation, and limitation period. Ask a tax professional for a written retention policy and preserve records related to property for as long as needed to establish basis and later transactions.

Official Tax Resources

• IRS Self-Employed Individuals Tax Center
• IRS Self-Employment Tax Guidance
• IRS Standard Mileage Rates
• IRS Estimated Taxes
• California FTB Sole Proprietorship Guidance
• California Estimated Tax Payments
• California FTB LLC Guidance

Editorial note: This article was reviewed against official IRS and California Franchise Tax Board information available on October 29, 2026. Tax rates, mileage rates, reporting thresholds, forms, deadlines, and entity rules can change. Verify the requirements for the relevant tax year before filing or making a payment.