Understanding the Shopify Balance Earnings Rate
With Shopify Balance, you can earn rewards based on the funds held in your account.
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Eligibility
All Shopify Balance accounts that are open and in good standing are eligible to receive an earnings rate incentive. For more information, refer to the Shopify Balance terms of service and Shopify Earnings Rate Reward terms of service.
If your store is on the Shopify Plus plan, then you might be eligible for a higher earnings rate. You can find the latest reward rate at https://www.shopify.com/balance or through your Shopify admin.
Earning rate
The earnings rate for your Shopify Balance account is calculated daily. Each day’s calculation is based on your account’s closing balance and the reward rate applicable to your Shopify plan at the end of that day. Shopify Balance earnings rate incentives are paid to your Shopify Balance account monthly. The rate is variable, and it can change without notice.
The earnings rate is accrued in all of your Shopify Balance accounts. If you have more than one account, then the earnings rate is accrued and paid on each account individually, not just the main account.
Earnings rate payments
Earnings rate payments are added to your Shopify Balance account on the 5th of the following month. If the 5th is on a weekend or holiday, then the earnings rate payment is added the next business day. The earnings rate is paid only in whole cents, with a minimum of $0.01 USD.
When the deposit is credited to your Shopify Balance account, the earnings rate is compounded monthly as long it isn’t withdrawn. The payout date can change at Shopify’s discretion.
Find the current earnings rate
You can find the latest earnings rate at https://www.shopify.com/balance or through your Shopify admin.
Steps:
From your Shopify admin, go to Finance > Balance.
The current earnings rate is listed on the Cashflow insights card.
Earnings rate calculation examples
Review the following examples to understand how earnings rates are calculated and how different scenarios can affect them. These calculations assume no deposits or withdrawals during the specified periods. The earnings rate is compounded monthly if not withdrawn, and the total amount includes all earnings during those periods.
The earnings rate is an annual rate, and each day represents a small portion of that rate. This portion is referred to as the daily reward rate.
| Scenario | Earnings rewards rate | Reward calculation (days in the month x daily closing balance x prorated APY rate) | Reward amount | Total balance |
|---|---|---|---|---|
| New account opened on June 1 with $10,000 USD deposit | 5% | 30 days x $10,000.00 USD x 0.000134 | $40.20 USD | $10,040.20 USD |
| Earnings reward rate increases to 5.5% on July 5 | 5.5% | (4 days x $10,000.00 USD x 0.000134) + (27 days x $10,040.20 USD x 0.000147) | $45.21 USD | $10,085.41 USD |
| New $20,000 USD deposit on August 1 | 5.5% | (4 days x $30,040.20 USD x 0.000147) + (27 days x $30,085.41 USD x 0.000147) | $137.07 USD | $30,085.41 USD |
From June 1 to August 31, the Shopify Balance account earned $222.48 USD.
Tax reporting with Form 1099-MISC
If you receive earnings on funds in your Shopify Balance account, then Shopify may issue a Form 1099-MISC.
Form 1099-MISC is a tax document issued to United States citizens or tax residents who receive $600 USD or more in income from sources such as Shopify Balance earnings rate incentives that aren't captured by Form 1099-K during a tax year. Learn more about Form 1099-K.
You might be required to report these values when you file your income taxes. Form 1099-MISC is generated by Shopify Payments and is provided to you and the Internal Revenue Service (IRS) annually.
If you meet the criteria to receive a Form 1099-MISC, then you can download your form from your Shopify admin from January 31 each year.
Steps:
Desktop
From your Shopify admin, go to Finance.
Click Documents.
Select 1099-MISC.
Click the 1099-MISC form you want to download.
—
Mobile
From the Shopify app, tap the
icon.Tap Finance.
In the Finance section, tap ….
In the Documents menu, tap 1099-MISC.
In the 1099-MISC forms section, tap the tax form you want to download.
To ensure that your tax information is correct and up to date, or if you meet the criteria but can't view your Form 1099-MISC, then contact Shopify Support.
If you meet the criteria but can't locate your 1099-MISC form using the steps above, then you can contact Shopify Support.
Opting out of receiving earnings rate incentives
Opting out of receiving earnings rate incentives through Shopify Balance isn't available. If you prefer not to accept earnings rate incentives due to personal or religious reasons, then you need to close your Shopify Balance account.