Shopify affiliate marketing: how the money flows for a brand

By the RecruitAffiliates.ai team · 27 October 2026 · 10 min read

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In Shopify affiliate marketing, you pay the commission and an app tracks each sale. A person shares a link or code. A buyer uses it. The app records the order, holds the commission while the return period runs, then you pay it. Fees and tax come on top.

Here are the terms, in plain words:

A commission is the share of a sale you pay the person who sent it.
A hold is the wait before a commission becomes payable. It covers the return period.
A clawback is money you take back after you have already paid it. See the fraud guide for how.
A payout is the moment a commission reaches the affiliate.

This guide follows one sale from click to payout. It does not cover setup or recruiting. For those, see our Shopify affiliate program guide.

Who pays whom?

Three parties touch the money, and each has one job.

Party	What they do with the money
You, the brand	Pay the commission and any fees
The affiliate app	Tracks the sale and works out what is owed
The affiliate	Gets paid after the hold ends

With Shopify Collabs, Shopify's own affiliate app, the flow has one more step. Shopify says that once the hold is over, "the commission is automatically added to your upcoming Shopify bill" (Shopify Help Center, Collabs payments for merchants, checked 27 October 2026). So you pay Shopify on your normal bill. Shopify then pays the creator.

Other affiliate apps may work differently. Some only report what you owe, and you send the money yourself. Ask before you choose.

How does a sale get tracked?

The app ties each order to a person in one of two ways: a tracking link or a discount code.

A tracking link is a web address with a code in it. A discount code is a short word the buyer types at checkout. Collabs gives each approved creator personalized links and codes (Shopify App Store, Collabs, checked 27 October 2026). You also get an alert when a customer buys through a creator's link (Shopify Help Center, Collabs programs, checked 27 October 2026).

Three settings shape what you pay on:

The rate. You set a commission percentage on all products or on one collection, and different rates for different collections, in an open access program (Shopify Help Center, Collabs programs, checked 27 October 2026).
The customer discount. In an invite program, you can also give the buyer a discount when they use the link or code (Shopify Help Center, Collabs programs, checked 27 October 2026). That discount is part of your cost.
The click window. This is how long after a click a sale still counts for that person. Ask your app how long it is, then write it into your terms.

On the window, our reading of 73 public Shopify program pages that state one found 78% say 30 days. See the commission rates research. For the rate itself, use our guide on what commission to pay.

When does the money move?

Money moves in five steps, and the longest wait is the hold.

Day 0: the order. A buyer clicks a link or uses a code, and pays you for the product.
Day 0 to the end of the hold: pending. Shopify says the commission is "marked as pending for a holding period to make sure the order isn't refunded" (Shopify Help Center, Collabs payments for creators, checked 27 October 2026).
End of the hold: it goes on your bill. The default hold is 30 days. You can set it from 1 to 90 days in your Collabs settings (Shopify Help Center, Collabs payments for merchants, checked 27 October 2026).
Your bill is paid. You pay Shopify the commission plus the 2.9% processing fee (Shopify Help Center, Collabs payments for merchants, checked 27 October 2026).
Payout. Creators who turned on automatic payouts are paid twice a month. A payout only runs when their balance reaches $25, and it is made in US dollars (Shopify Help Center, Collabs payments for creators, checked 27 October 2026).

Here is an example with plain numbers. It is not a forecast.

Let's say a skincare serum costs $80, and you pay 10%. That is $8 in commission. The 2.9% processing fee on $8 is about $0.23. So the sale costs you $8.23 in affiliate costs, on top of the product and shipping.

Day	What happens
0	Buyer orders the serum through a creator's link
1 to 30	The $8 sits as pending
31	The $8 and the fee join your next Shopify bill
After you pay your bill	The creator is paid out, if they use automatic payouts and have reached $25

A single $8 commission would not reach $25 alone. The creator would wait for more sales. That is normal, and worth saying in your terms so nobody is surprised.

What happens when an order is refunded?

If the buyer returns the order during the hold, the commission is cancelled. Shopify says "the commission of canceled and fully refunded orders are automatically canceled" (Shopify Help Center, Collabs payments for merchants, checked 27 October 2026). So Shopify says no commission is paid on that order.

Partial refunds and later refunds are less clear-cut. The creator help page says "Commission might be adjusted based on order refunds and cancelations" (Shopify Help Center, Collabs payments for creators, checked 27 October 2026). The current merchant page does not give a number of days for tracking refunds. Check your own settings.

So the hold is your main protection. Set it to at least your return window. For chargebacks and clawback wording, see the affiliate fraud guide.

What does it cost besides commission?

Commission is the main cost, but four others can appear. Check each against the app you use.

Cost	What Shopify says for Collabs
App fee	The app is free to install, and the listing adds "Additional charges may apply" (Shopify App Store, Collabs, checked 27 October 2026)
Processing fee	"There's a 2.9% processing fee applied to every automatic commission payment" (Shopify Help Center, Collabs payments for merchants, checked 27 October 2026)
Currency fee	If a creator picks a different payout currency, they might be charged a conversion fee (Shopify Help Center, Collabs payments for creators, checked 27 October 2026)
The customer discount	Set by you in an invite program

The processing fee is on the commission, not on the sale. On an $8 commission it is about 23 cents. At 1,000 commission payments of $8 each, it is about $232. Compare that with the fee of any other app you consider.

Your own time is a cost too. Someone has to approve people and answer their questions. Our post on what an affiliate program is covers the wider costs of a program.

What are the tax basics?

Tax rules depend on where you and your affiliates live, so treat this as a map, not advice. Ask an accountant about your own case.

In the US, the IRS says to use Form 1099-NEC "to report nonemployee compensation" (IRS, About Form 1099-NEC, checked 27 October 2026). The IRS instructions put the reporting threshold at $2,000 for tax years beginning after 2025. The form is due to the IRS by January 31 (IRS, Instructions for Forms 1099-MISC and 1099-NEC, checked 27 October 2026).

What this means for a brand:

Collect a W-9 early. A W-9 is a form where a person gives you their tax details. US merchants can turn on W-9 collection in Collabs. Without a form, a creator's payouts are limited to $599.99 USD a year (Shopify Help Center, Collabs payments for merchants, checked 27 October 2026).
Ask who reports what. When Shopify pays creators through your bill, an accountant can tell you whether you still file anything.
Treat commission as a cost. It may count as a cost of sales in your books. Your accountant decides.
Outside the US, your own tax office sets the rules for paying people abroad.

Six questions to ask your app before you launch

Use these for Collabs or any other app. Write the answers into your terms.

How long does a click count for?
How long is the hold, and can I change it?
Does the app pay creators, or only report what I owe?
What does it charge per payment?
What happens to commission when an order is partly or fully refunded?
Does it collect tax forms from affiliates?

Once these are settled, check your margin with the commission guide. Then use the first 10 affiliates in 14 days plan to fill the program.

Where RecruitAffiliates.ai fits

RecruitAffiliates.ai covers the people part. It does not track sales or pay commission, so you still need a tracking tool.

You enter your website. It finds websites, blogs, review sites, newsletters, podcasts, YouTube channels and Instagram and TikTok creators already covering shops like yours. Each one comes with the page that shows it, so you can judge the fit. It looks for each person's email and checks what it finds, so you get a verified email. AI drafts a personal first email. You approve it, and it sends from your own inbox. Replies land in that inbox. A campaign is four emails in one thread.

Launch is $79 a month for one brand, with a 7-day free trial and no card.

Frequently asked questions

Who pays the affiliate in Shopify affiliate marketing?

You do. With Shopify Collabs, the commission goes onto your Shopify bill after the hold. Shopify then pays the creator. Other apps may only report what you owe.

How long until an affiliate gets paid?

In Collabs, the default hold is 30 days, and you can set it from 1 to 90. After that, creators who turn on automatic payouts are paid twice a month once their balance reaches $25.

What happens if a customer returns the order?

A cancelled or fully refunded order cancels the commission during the hold. Later and partial refunds may adjust it, so set your hold to at least your return window.

Does Shopify charge a fee on affiliate commission?

For Collabs, Shopify lists a 2.9% processing fee on every automatic commission payment. The app listing also says additional charges may apply.

Do I need to send affiliates a tax form?

In the US, you may need to file Form 1099-NEC for payments of $2,000 or more in a tax year beginning after 2025. Ask an accountant whether paying through Shopify changes who files.

Can I pay affiliates myself instead?

Some apps may let you do that. Collabs states it adds commission to your Shopify bill. If you pay by hand, you handle the transfers, the records and any tax forms.