diff --git a/src/extensions/splitpay/index.ts b/src/extensions/splitpay/index.ts
new file mode 100644
index 00000000..5fed177f
--- /dev/null
+++ b/src/extensions/splitpay/index.ts
@@ -0,0 +1,88 @@
+/**
+ * Split Payments Extension for Lightning.Pub
+ *
+ * Automatically distributes a percentage of every incoming payment
+ * to one or more recipients. Supports Nostr pubkeys, LNURL, and
+ * Lightning Addresses as targets.
+ *
+ * Dual-layer architecture:
+ * - Layer 1 (preferred): NIP-57 zap tags — Nostr wallets split at sender side
+ * - Layer 2 (fallback): Internal splits via onPaymentReceived for non-Nostr payments
+ *
+ * The recursion guard (metadata.splitted = true) prevents the two layers
+ * from fighting — if a Nostr wallet already split the payment, the
+ * extension recognizes this and stays quiet.
+ */
+
+import {
+  Extension,
+  ExtensionInfo,
+  ExtensionContext,
+  ExtensionDatabase
+} from '../types.js'
+import { runMigrations } from './migrations.js'
+import { SplitPayManager } from './managers/splitPayManager.js'
+import { SetTargetsRequest, GetHistoryRequest } from './types.js'
+
+export default class SplitPayExtension implements Extension {
+  readonly info: ExtensionInfo = {
+    id: 'splitpay',
+    name: 'Split Payments',
+    version: '1.0.0',
+    description: 'Automatically split incoming payments to multiple recipients',
+    author: 'Lightning.Pub',
+    minPubVersion: '1.0.0'
+  }
+
+  private manager!: SplitPayManager
+
+  async initialize(ctx: ExtensionContext, db: ExtensionDatabase): Promise<void> {
+    await runMigrations(db)
+
+    this.manager = new SplitPayManager(ctx, db)
+
+    this.registerRpcMethods(ctx)
+
+    ctx.log('info', 'Extension initialized')
+  }
+
+  async shutdown(): Promise<void> {
+    // No cleanup needed
+  }
+
+  /**
+   * Register RPC methods
+   */
+  private registerRpcMethods(ctx: ExtensionContext): void {
+    // Set targets (replaces all existing)
+    ctx.registerMethod('splitpay.setTargets', async (req, appId, userPubkey) => {
+      if (!userPubkey) {
+        throw new Error('Authentication required')
+      }
+      return this.manager.setTargets(appId, userPubkey, req as SetTargetsRequest)
+    })
+
+    // Get current targets
+    ctx.registerMethod('splitpay.getTargets', async (req, appId) => {
+      return this.manager.getTargets(appId)
+    })
+
+    // Clear all targets
+    ctx.registerMethod('splitpay.clearTargets', async (req, appId, userPubkey) => {
+      if (!userPubkey) {
+        throw new Error('Authentication required')
+      }
+      await this.manager.clearTargets(appId)
+      return { success: true }
+    })
+
+    // Get split payment history
+    ctx.registerMethod('splitpay.getHistory', async (req, appId) => {
+      const { limit, offset } = (req || {}) as GetHistoryRequest
+      return this.manager.getHistory(appId, limit, offset)
+    })
+  }
+}
+
+export * from './types.js'
+export { SplitPayManager } from './managers/splitPayManager.js'
diff --git a/src/extensions/splitpay/managers/splitPayManager.ts b/src/extensions/splitpay/managers/splitPayManager.ts
new file mode 100644
index 00000000..497ee1df
--- /dev/null
+++ b/src/extensions/splitpay/managers/splitPayManager.ts
@@ -0,0 +1,244 @@
+/**
+ * Split Payments Manager
+ *
+ * Handles target configuration and automatic payment splitting.
+ * When a payment is received, distributes configured percentages to targets.
+ */
+
+import crypto from 'crypto'
+import { ExtensionContext, ExtensionDatabase, PaymentReceivedData } from '../../types.js'
+import {
+  SplitTarget,
+  SplitTargetRow,
+  SplitRecord,
+  SplitRecordRow,
+  SetTargetsRequest,
+  GetTargetsResponse,
+  GetHistoryResponse
+} from '../types.js'
+
+function generateId(): string {
+  return crypto.randomBytes(16).toString('hex')
+}
+
+function rowToTarget(row: SplitTargetRow): SplitTarget {
+  return {
+    id: row.id,
+    application_id: row.application_id,
+    recipient: row.recipient,
+    percent: row.percent,
+    alias: row.alias,
+    creator_pubkey: row.creator_pubkey,
+    created_at: row.created_at
+  }
+}
+
+function rowToRecord(row: SplitRecordRow): SplitRecord {
+  return {
+    id: row.id,
+    application_id: row.application_id,
+    source_payment_hash: row.source_payment_hash,
+    target_id: row.target_id,
+    recipient: row.recipient,
+    amount_sats: row.amount_sats,
+    payment_hash: row.payment_hash,
+    status: row.status as SplitRecord['status'],
+    error: row.error,
+    created_at: row.created_at
+  }
+}
+
+export class SplitPayManager {
+  private ctx: ExtensionContext
+  private db: ExtensionDatabase
+
+  constructor(ctx: ExtensionContext, db: ExtensionDatabase) {
+    this.ctx = ctx
+    this.db = db
+
+    // Subscribe to incoming payments
+    ctx.onPaymentReceived(this.onPaymentReceived.bind(this))
+  }
+
+  // ===========================================================================
+  // Target Management
+  // ===========================================================================
+
+  /**
+   * Set targets for an application (replaces all existing targets)
+   */
+  async setTargets(
+    applicationId: string,
+    creatorPubkey: string,
+    request: SetTargetsRequest
+  ): Promise<GetTargetsResponse> {
+    // Validate
+    if (!request.targets || !Array.isArray(request.targets)) {
+      throw new Error('targets must be an array')
+    }
+
+    let totalPercent = 0
+    for (const entry of request.targets) {
+      if (!entry.recipient) {
+        throw new Error('Each target must have a recipient')
+      }
+      if (typeof entry.percent !== 'number' || entry.percent <= 0 || entry.percent > 100) {
+        throw new Error(`Invalid percent for ${entry.recipient}: must be between 0 and 100`)
+      }
+      totalPercent += entry.percent
+    }
+
+    if (totalPercent > 100) {
+      throw new Error(`Total percent (${totalPercent}%) exceeds 100%`)
+    }
+
+    const now = Math.floor(Date.now() / 1000)
+
+    // Replace all targets atomically
+    await this.db.transaction(async () => {
+      await this.db.execute(
+        `DELETE FROM split_targets WHERE application_id = ?`,
+        [applicationId]
+      )
+
+      for (const entry of request.targets) {
+        await this.db.execute(
+          `INSERT INTO split_targets (id, application_id, recipient, percent, alias, creator_pubkey, created_at)
+           VALUES (?, ?, ?, ?, ?, ?, ?)`,
+          [generateId(), applicationId, entry.recipient, entry.percent, entry.alias || null, creatorPubkey, now]
+        )
+      }
+    })
+
+    return this.getTargets(applicationId)
+  }
+
+  /**
+   * Get targets for an application
+   */
+  async getTargets(applicationId: string): Promise<GetTargetsResponse> {
+    const rows = await this.db.query<SplitTargetRow>(
+      `SELECT * FROM split_targets WHERE application_id = ? ORDER BY created_at`,
+      [applicationId]
+    )
+
+    const targets = rows.map(rowToTarget)
+    const totalPercent = targets.reduce((sum, t) => sum + t.percent, 0)
+
+    return { targets, total_percent: totalPercent }
+  }
+
+  /**
+   * Clear all targets for an application
+   */
+  async clearTargets(applicationId: string): Promise<void> {
+    await this.db.execute(
+      `DELETE FROM split_targets WHERE application_id = ?`,
+      [applicationId]
+    )
+  }
+
+  /**
+   * Get split payment history
+   */
+  async getHistory(
+    applicationId: string,
+    limit: number = 50,
+    offset: number = 0
+  ): Promise<GetHistoryResponse> {
+    const countResult = await this.db.query<{ count: number }>(
+      `SELECT COUNT(*) as count FROM split_records WHERE application_id = ?`,
+      [applicationId]
+    )
+    const total = countResult[0]?.count || 0
+
+    const rows = await this.db.query<SplitRecordRow>(
+      `SELECT * FROM split_records WHERE application_id = ?
+       ORDER BY created_at DESC LIMIT ? OFFSET ?`,
+      [applicationId, limit, offset]
+    )
+
+    return {
+      records: rows.map(rowToRecord),
+      total
+    }
+  }
+
+  // ===========================================================================
+  // Payment Splitting
+  // ===========================================================================
+
+  /**
+   * Handle incoming payment — split to configured targets
+   */
+  private async onPaymentReceived(payment: PaymentReceivedData): Promise<void> {
+    // Prevent infinite recursion: skip payments that are themselves splits
+    if (payment.metadata?.splitted) {
+      return
+    }
+
+    // Determine application ID from payment metadata
+    const applicationId = payment.metadata?.applicationId || payment.metadata?.application_id
+    if (!applicationId) {
+      return
+    }
+
+    const { targets } = await this.getTargets(applicationId)
+    if (targets.length === 0) {
+      return
+    }
+
+    const totalPercent = targets.reduce((sum, t) => sum + t.percent, 0)
+    if (totalPercent > 100) {
+      this.ctx.log('error', `Split targets for ${applicationId} exceed 100% (${totalPercent}%) — skipping`)
+      return
+    }
+
+    this.ctx.log('info', `Splitting payment ${payment.paymentHash} (${payment.amountSats} sats) to ${targets.length} targets`)
+
+    for (const target of targets) {
+      const amountSats = Math.floor(payment.amountSats * target.percent / 100)
+      if (amountSats <= 0) {
+        continue
+      }
+
+      const recordId = generateId()
+      const now = Math.floor(Date.now() / 1000)
+      const memo = `Split: ${target.percent}% to ${target.alias || target.recipient}`
+
+      // Record pending split
+      await this.db.execute(
+        `INSERT INTO split_records (id, application_id, source_payment_hash, target_id, recipient, amount_sats, status, created_at)
+         VALUES (?, ?, ?, ?, ?, ?, 'pending', ?)`,
+        [recordId, applicationId, payment.paymentHash, target.id, target.recipient, amountSats, now]
+      )
+
+      try {
+        // Create invoice for the recipient and pay it
+        const invoice = await this.ctx.createInvoice(amountSats, {
+          memo,
+          metadata: { splitted: true, source: payment.paymentHash, targetId: target.id }
+        })
+
+        const result = await this.ctx.payInvoice(applicationId, invoice.paymentRequest)
+
+        // Record success
+        await this.db.execute(
+          `UPDATE split_records SET status = 'success', payment_hash = ? WHERE id = ?`,
+          [result.paymentHash, recordId]
+        )
+
+        this.ctx.log('info', `Split ${amountSats} sats to ${target.alias || target.recipient}`)
+      } catch (error) {
+        const errorMsg = error instanceof Error ? error.message : String(error)
+
+        await this.db.execute(
+          `UPDATE split_records SET status = 'failed', error = ? WHERE id = ?`,
+          [errorMsg, recordId]
+        )
+
+        this.ctx.log('error', `Failed to split ${amountSats} sats to ${target.alias || target.recipient}: ${errorMsg}`)
+      }
+    }
+  }
+}
diff --git a/src/extensions/splitpay/migrations.ts b/src/extensions/splitpay/migrations.ts
new file mode 100644
index 00000000..81172fe8
--- /dev/null
+++ b/src/extensions/splitpay/migrations.ts
@@ -0,0 +1,90 @@
+/**
+ * Split Payments Extension Database Migrations
+ */
+
+import { ExtensionDatabase } from '../types.js'
+
+export interface Migration {
+  version: number
+  name: string
+  up: (db: ExtensionDatabase) => Promise<void>
+}
+
+export const migrations: Migration[] = [
+  {
+    version: 1,
+    name: 'create_split_targets_table',
+    up: async (db: ExtensionDatabase) => {
+      await db.execute(`
+        CREATE TABLE IF NOT EXISTS split_targets (
+          id TEXT PRIMARY KEY,
+          application_id TEXT NOT NULL,
+          recipient TEXT NOT NULL,
+          percent REAL NOT NULL,
+          alias TEXT,
+          creator_pubkey TEXT NOT NULL,
+          created_at INTEGER NOT NULL
+        )
+      `)
+
+      await db.execute(`
+        CREATE INDEX IF NOT EXISTS idx_split_targets_app
+        ON split_targets(application_id)
+      `)
+    }
+  },
+  {
+    version: 2,
+    name: 'create_split_records_table',
+    up: async (db: ExtensionDatabase) => {
+      await db.execute(`
+        CREATE TABLE IF NOT EXISTS split_records (
+          id TEXT PRIMARY KEY,
+          application_id TEXT NOT NULL,
+          source_payment_hash TEXT NOT NULL,
+          target_id TEXT NOT NULL,
+          recipient TEXT NOT NULL,
+          amount_sats INTEGER NOT NULL,
+          payment_hash TEXT,
+          status TEXT NOT NULL DEFAULT 'pending',
+          error TEXT,
+          created_at INTEGER NOT NULL
+        )
+      `)
+
+      await db.execute(`
+        CREATE INDEX IF NOT EXISTS idx_split_records_app
+        ON split_records(application_id, created_at DESC)
+      `)
+
+      await db.execute(`
+        CREATE INDEX IF NOT EXISTS idx_split_records_source
+        ON split_records(source_payment_hash)
+      `)
+    }
+  }
+]
+
+/**
+ * Run all pending migrations
+ */
+export async function runMigrations(db: ExtensionDatabase): Promise<void> {
+  const versionResult = await db.query<{ value: string }>(
+    `SELECT value FROM _extension_meta WHERE key = 'migration_version'`
+  ).catch(() => [])
+
+  const currentVersion = versionResult.length > 0 ? parseInt(versionResult[0].value, 10) : 0
+
+  for (const migration of migrations) {
+    if (migration.version > currentVersion) {
+      console.log(`[SplitPay] Running migration ${migration.version}: ${migration.name}`)
+      await migration.up(db)
+
+      await db.execute(
+        `INSERT INTO _extension_meta (key, value) VALUES ('migration_version', ?)
+         ON CONFLICT(key) DO UPDATE SET value = excluded.value`,
+        [String(migration.version)]
+      )
+    }
+  }
+}
diff --git a/src/extensions/splitpay/types.ts b/src/extensions/splitpay/types.ts
new file mode 100644
index 00000000..fe26ab8d
--- /dev/null
+++ b/src/extensions/splitpay/types.ts
@@ -0,0 +1,96 @@
+/**
+ * Split Payments Extension Types
+ */
+
+/**
+ * A split target — receives a percentage of every incoming payment
+ */
+export interface SplitTarget {
+  id: string
+  application_id: string
+  recipient: string             // Nostr pubkey, LNURL, or Lightning Address
+  percent: number               // 0-100
+  alias: string | null          // Display name
+  creator_pubkey: string        // Who configured this split
+  created_at: number
+}
+
+/**
+ * Database row for split target
+ */
+export interface SplitTargetRow {
+  id: string
+  application_id: string
+  recipient: string
+  percent: number
+  alias: string | null
+  creator_pubkey: string
+  created_at: number
+}
+
+/**
+ * A record of a completed split payment
+ */
+export interface SplitRecord {
+  id: string
+  application_id: string
+  source_payment_hash: string   // The incoming payment that triggered the split
+  target_id: string             // Which target received this
+  recipient: string             // Resolved recipient (for history)
+  amount_sats: number
+  payment_hash: string | null   // Outgoing payment hash (null if failed)
+  status: 'pending' | 'success' | 'failed'
+  error: string | null
+  created_at: number
+}
+
+/**
+ * Database row for split record
+ */
+export interface SplitRecordRow {
+  id: string
+  application_id: string
+  source_payment_hash: string
+  target_id: string
+  recipient: string
+  amount_sats: number
+  payment_hash: string | null
+  status: string
+  error: string | null
+  created_at: number
+}
+
+/**
+ * Request to set targets (replaces all existing targets)
+ */
+export interface SetTargetsRequest {
+  targets: {
+    recipient: string
+    percent: number
+    alias?: string
+  }[]
+}
+
+/**
+ * Response after getting targets
+ */
+export interface GetTargetsResponse {
+  targets: SplitTarget[]
+  total_percent: number
+}
+
+/**
+ * Request to get split history
+ */
+export interface GetHistoryRequest {
+  limit?: number
+  offset?: number
+}
+
+/**
+ * Response for split history
+ */
+export interface GetHistoryResponse {
+  records: SplitRecord[]
+  total: number
+}