The Transfer Fee extension is a Token-2022 module that automatically withholds a configurable percentage of every token transfer. The withheld amount accumulates in recipient token accounts and can be harvested to a designated fee account.

Transfer fees are set at the token level and apply to all transfers — buys, sells, wallet transfers. The fee percentage and maximum fee amount are configurable by the fee authority at creation, or can be updated if the token has a mutable fee authority.

Transfer fees are commonly used by Solana projects to fund buyback-and-burn programs, liquidity additions, development treasuries, or reflection reward distributions to stakers.