Commission Calculation

This is the reference page for how every dollar of commission is calculated. If you want to know why an affiliate's commission is $12.47 and not $12.50, this is the page.

What counts toward commission

Commission is calculated on the order subtotal — the sum of line item prices after discounts but before tax and shipping.

Example: An order with a $100 line item, 10% coupon ($10 off), $5 shipping, $9 tax:

• Subtotal = $100 − $10 = $90.
• Shipping = $5. Tax = $9.
• Order total = $104.
• Commission basis = $90 (not $104, not $100).

The commission rules — formulas

1. Fixed – Percentage

commission = subtotal × (rate / 100)

Example: Subtotal $90, rate 15% → 90 × 0.15 = $13.50.

2. Fixed – Flat amount

commission = flat_amount

Always the same regardless of subtotal. An order of $10 earns the same as $1000.

3. Tiered by order value

tier = highest tier where subtotal ≥ tier.minOrderValue
commission = subtotal × (tier.rate / 100)

Tiers are applied to the whole subtotal, not marginal.

Example: Tiers at $0 = 5%, $100 = 10%, $500 = 15%.

• Subtotal $90 → tier $0+ at 5% → 90 × 0.05 = $4.50.
• Subtotal $200 → tier $100+ at 10% → 200 × 0.10 = $20.
• Subtotal $600 → tier $500+ at 15% → 600 × 0.15 = $90.

4. Special product commissions (per-product overrides)

Available when commission rule = Fixed commission. Overrides the default rate for specific products.

commission = SUM over line items of (line_total × effective_rate)
where effective_rate = product_override_rate OR program_default_rate

Example: Program default 10%, Product A override 20%.

Order contains 2× Product A at $50 each (= $100), and 1× Product B at $50 (= $50).

• Product A line: 100 × 20% = $20.
• Product B line: 50 × 10% = $5.
• Total commission = $25.

Rounding

All commission amounts are rounded to 2 decimal places using standard half-up rounding ($0.005 rounds up to $0.01).

Example: 83.50 × 15% = 12.525 → rounds to $12.53.

We do not use banker's rounding (which rounds $0.005 to nearest even). Straight half-up keeps things predictable for affiliates.

Currency

• Commissions are calculated in the shop's base currency.
• For multi-currency stores, Shopify converts line-item prices to base currency at order time. We use the converted values.
• Affiliate payouts are shown in the same base currency.

Refund adjustments

Refunds reduce commission using a proportional rule for percentage programs:

commission_adjustment = refund_amount × (rate / 100)
net_commission = original_commission − commission_adjustment

If the commission was already Paid when the refund happens, the app cannot edit the locked Paid row. Instead it creates a new row with status Refund adjustment holding the negative amount. That negative amount is automatically deducted from the affiliate's next payout.

For flat-amount programs, commission only drops when refunds reach the full order total. See Refund Handling.

Zero or negative commissions

• Zero subtotal (e.g. free gift order, 100% discount) → commission = $0. No conversion is created.
• Negative commissions from refunds → the affiliate's unpaid balance can never go below $0. If refunds exceed earnings, the affiliate just stays at $0 and the merchant absorbs the overpayment.

Tax on commission

The app does not handle tax on commission. Depending on your jurisdiction:

• US: issue 1099-NEC if the affiliate earns ≥ $600/year. Export payout history (contact support for CSV).
• EU/UK: commission may be VATable if the affiliate is a registered business. Ask your accountant.

The app does not withhold or report to tax authorities — that is on you and the affiliate.

Commission on pre-orders / deferred orders

Commission is calculated when the order is placed, not when it ships. If an order is later cancelled before shipping, the commission is treated like a refund (see Refund Handling).

Next step

• Commission Types
• Refund Handling