Pay creators on Collabs

Creators who actively collaborate with you on Shopify Collabs can earn affiliate commission for promoting and selling your products. Affiliate commissions can be earned by a creator through affiliate links or discount codes that are created and tracked through Shopify Collabs. When a creator’s audience makes a purchase using an affiliate link or code, the creator earns an affiliate commission and the appropriate amount will be processed to the creator.

Payments

Commissions to creators are processed through your Shopify bill automatically using Collabs automatic payments. They display on your Shopify bill as a separate item called Shopify Collabs Commission.

Note

If you joined Collabs before April 27, 2023, then creators could be paid for commissions earned through Shopify Collabs by using the manual payments feature. However, this feature is no longer available after January 8, 2024. All outstanding manual payments must be settled before February 28, 2024.

To check for outstanding manual payments, refer to the Outstanding manual payments tab in your Payments table in Collabs.

Automatic payments

All affiliate commissions from future orders are first subject to a holding period. During this period, the commission of canceled and fully refunded orders are automatically canceled. Also, during this period you can open a payment dispute. The default holding period is 30 days, but this can be changed in your Shopify Collabs settings.

Steps:

1. In your Shopify admin, go to Apps > Collabs > Payments.
2. Click Settings.
3. In the Payment holding period section, enter a holding period between 1-90 days.
4. Click Save changes.

After the holding period is over, the commission is automatically added to your upcoming Shopify bill (or sooner if you've reached your billing threshold). After you pay your Shopify bill, the commission is paid out to your Collabs creators if they have activated automatic payouts on their side.

Note

Every creator you work with also needs to activate auto-payouts on their side to get paid via PayPal or bank transfer. If they have not activated auto-payouts, then the commission after the 30-day holding period will move to the “waiting for creator” state.

There is a 2.9% processing fee applied to every automatic commission payment, which is reflected in your Shopify bill. For example, if your affiliate product sale total is $100 and commission earned by the creator is 10%, then the 2.9% processing fee will be 29 cents.

Moreover, automatic payments are handled in USD and charged to you in the currency of your Shopify bill. If your Shopify bill is in a currency other than USD, then local currency conversion fees might apply. Likewise, if a creator chooses to cash out in a currency other than USD, then a payout currency conversion fee is paid by the creator.

Manual payments

Caution

As of January 8, 2024, no new commissions earned by creators on Collabs are tracked using manual payments. All payments are tracked and processed to creators using automatic payments via your Shopify bill. You can settle any outstanding manual payouts using PayPal until February 28, 2024, after which, this feature will no longer be available and you'll need to use other payment services outside of Shopify to settle any outstanding manual payouts.

Using manual payments, you pay your outstanding affiliate commission manually either through Collabs' integration with PayPal, or outside of Collabs and mark the payment as paid in Collabs.

You can view outstanding and historical manual payments from the Payments page in the Shopify Collabs app.

To activate manual payments through PayPal, you must have a PayPal Business Account, and you must have PayPal Payouts activated. For any issues settling existing manual payouts via PayPal, reach out to PayPal Support.

Payment disputes

When you're paying affiliate commission through automatic payments and find commission in the holding period suspicious, then you can open a dispute with the creator.

To dispute a payment, open creator details from the Holding period tab at the Payments page in Collabs app and press Open a dispute. Then, you need to provide dispute reason, details and the date from which all existing and future orders in the holding period would be disputed. Opening a dispute will trigger sending an email to the creator.

After you've discussed the dispute with the creator, you can go back to the creator details at the Payments page in the Collabs app and resolve the dispute. When resolving the dispute, select either all or some of the disputed commission to be paid out to the creator.

Taxes

Note

It's your responsibility to consult with local tax authorities or a tax professional to ensure compliance with your tax obligations.

A creator's services might be subject to sales or use tax. The responsibility to determine if taxes are payable are on the merchant and creator. For payments that are processed to creators with automatic payments, aggregate commissions earned by creators are displayed on your standard monthly invoice, and in such cases, Shopify collects and files taxes related to the sale of creator's services in certain jurisdictions in accordance with applicable law. For more information, refer to the Collabs Terms of Service.

If you’re a merchant who makes payments to creators during the year, then you might be required to issue them a Form 1099. This tax form is used to report the income earned by freelancers or independent contractors and is necessary for tax purposes. Merchants and creators in all cases have the responsibility to comply with their respective tax obligations, including reporting and remitting any applicable taxes and tax forms.

Activate W9 form collection

Merchants that are based in the United States can activate W9 form collection. When this option is activated, Shopify Collabs requests W9 forms from creators. If a creator doesn't submit a requested W9 form, then their payouts are limited to $599.99 USD per year.

Steps:

1. In your Shopify admin, go to Apps > Collabs > Payments.
2. Click Settings.
3. In the Creator tax forms section, select Collect W9 tax forms for all US creators on automatic payments
4. Click Save changes.

You can deactivate W9 tax form collection at any time by going to the Collabs app, and then going to Settings > Payments. Additionally, any W9 forms that were sent out and are blocking creators from surpassing $599.99 won't be rescinded.