As we embark on a new year, Skillshare will be making some important updates to the way we pay teachers.
At Skillshare, we believe teacher success is integral to the ongoing health of our platform and community. These payment updates are part of our commitment to continuously evolving as a business in ways that build sustainable, long-term success for both our teachers and the company.
In the next few months, you will see 4 major updates to the way Skillshare teachers earn revenue and receive payments:
- Switching from PayPal to Tipalti
- Introducing New Tax Processes
- Raising the Minimum Requirement to Earn Royalties
- Adapting the Teacher Referral Bonus
While these updates may feel substantial, we are confident that they are laying a strong foundation of sustainable growth for our teachers through 2022 and beyond, and address some of the improvements you’ve been asking for. Read on to find out more about each update, and what is required of you to prepare for them.
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Switching from PayPal to Tipalti
We have heard from many of our teachers that they would like an alternative to PayPal to receive their Skillshare payments, especially one that has fewer hidden fees and is more accessible for international teachers. As Skillshare grows internationally, this need becomes ever more important.
We are excited to announce a switch to Tipalti for all Skillshare teacher payments starting with the next payment on February 16th, 2022. Tipalti offers top-notch support, lower fees, and multiple payment options! Once onboarded to Tipalti, you may choose to continue receiving your payment through PayPal, which Tipalti supports as a payment method, or through new methods like direct deposit/bank transfer.
How does the Tipalti registration process work?
- You will receive an email invitation to register for an account with Tipalti on January 18th. The email will come from DoNotReply@skillshare.com to the email you use for your Skillshare teacher account, so keep an eye out!
- The email will include a unique registration link. Click through this to complete Tipalti’s 4-step registration process. These links expire within 3 days for security reasons, so please use the most recent registration link sent to you.
- You will need to complete Tipalti’s 4-step registration process by February 11th, in order to ensure no disruption to your payments.
I cannot find my registration email from Tipalti.
If you cannot find the registration email from Tipalti, please confirm you’re checking the email address associated with your Skillshare teacher account, and then check your spam folder. If you still cannot locate the most recent email, reach out to Tipalti directly at email@example.com and reference Skillshare.
My Tipalti registration link has expired.
We want to make sure no Skillshare teacher misses registration and experiences a disruption in their payments, so we will also send periodic reminder emails to anybody who has not yet registered. For security reasons, only the most recent registration link will work. If your registration link is expired, please locate the most recent email to successfully register.
When does this switch to Tipalti go into effect, and do I have to switch?
We will be switching all teacher payments from PayPal to Tipalti. Payments through Paypal will no longer be supported unless you designate Paypal as your payment method of choice within Tipaliti. The February 16th, 2022, payment will be the first we send through Tipalti, so it’s important all teachers complete their registration with Tipalti no later than February 11th.
Teachers who fail to sign up with Tipalti by February 11th will not be eligible to receive their Skillshare payment from February 16th, for earnings accrued in January. Teachers will not be eligible for future payments unless and until they complete their registration on Tipalti. If you believe you will not be able to complete registration by February 11, 2022, please email firstname.lastname@example.org as soon as possible to ensure there will not be a disruption in your payments.
We are really excited about this switch to Tipalti, and the many benefits it will offer to our teachers — lower fees, greater transparency, and more options in the way you receive your Skillshare payments. However, we understand that this is a big change, so if you become ineligible to receive payments because you failed to register with Tipalti by the February 11, 2022, deadline, reach out to email@example.com and we will review exceptions on a case-by-case basis, but have no obligation to do so. If you have trouble registering, please reach out to Tipalti using the instructions in the registration email.
Introducing New Tax Processes
When registering with Tipalti, you will notice a step to complete either a W-9 (for U.S. residents) or a W-8 (for non-U.S. residents) form. Some teachers may also need to complete a 4th step in the registration process, based on your location, and provide a signed affidavit for tax purposes. Skillshare is required to maintain up-to-date tax information about its teachers on behalf of the U.S. Internal Revenue Service (IRS).
What are W-8/W-9 forms and why do I need to fill one out?
IRS form W-9 is most commonly used by U.S.-based individuals when they are working as a freelancer or independent contractor. Skillshare will use the information provided on this form to report your earnings to the IRS.
IRS form W-8 is used by foreign individuals and businesses to document their non-U.S. status and to claim any applicable treaty benefits for tax purposes. If you are not a United States citizen or resident, you may be subject to tax withholding at a rate of up to 30% for income earned in the U.S. However, this rate of withholding may be lower or zero if you are a resident in a country that has an income tax treaty with the United States.
We are required to ensure that you have a valid tax form on file, so we can withhold taxes at the appropriate rate and meet our obligations with the IRS.
How do I know if I qualify for withholding, and how much tax will Skillshare withhold from my payments?
Tax withholding in general and the amount withheld will depend on the country in which you file taxes.
If you file for taxes in the United States, we anticipate that there will be no change to your payments from a tax perspective once we have a W-9 on file for you. You will continue to receive a 1099 form for your Skillshare teacher payments. The appropriate tax documentation will be gathered from you through Tipalti during their 4-step registration process.
If you file for taxes outside the United States, the rate of taxes withheld will vary by country, but can range from 0% (no taxes withheld) to 30% of your Skillshare income. It is important that you complete the tax form during Tipalti registration so the correct tax rate is withheld.
Skillshare cannot give personal tax or legal advice. For more information please review NRA Withholding on the IRS website. If you still have questions about taxes, please contact your legal and/or tax advisor.
What is the 4th step in the Tipalti registration process, and do I need to complete it?
While registering for Tipalti, you will notice a 4th step where we request a signed affidavit for tax purposes. This is not a required step for all teachers. If you are based outside the United States and taught with Skillshare in 2021 or earlier, you will need to complete this step and provide a signed affidavit. Instructions are located within the registration process. All other teachers may click Next and complete the registration process. If you have any questions about this step, please reach out to firstname.lastname@example.org.
How will I know how much I’m earning before taxes?
You will continue to see your monthly royalty and referral bonus earnings on your Teacher Stats dashboard on Skillshare; these will be displayed as they currently are, pre-taxes. The payment you receive via Tipalti each month may look different than what you see on your Teacher Stats dashboard, depending on any tax withholdings. For more information on the taxes withheld from your monthly payments, log in to your Tipalti account and visit the Payment and Invoice History tab.
Raising the Minimum Requirement to Earn Royalties
For many years, teachers only had to accrue 30 paid minutes watched each month to receive a royalty payment from Skillshare. This equates to roughly $2 per month. Over time, the costs to process these payments have exceeded the actual amount paid.
To better reflect this and help create fair earning opportunities for all teachers, and to support long-term success and sustainable growth for the business and our teacher community, Skillshare is increasing the minimum amount of paid minutes watched required for a teacher to receive a monthly royalties payment.
Effective February 1st, 2022, teachers must earn a minimum total of 75 paid minutes watched across all of their classes within a month in order to receive a royalty payment for that month. This means that the new minimum will apply for the first time to your February royalties, to be paid out March 16th, 2022. (Note that the minimum applies only to class royalties, not referral bonuses.)
Adapting the Teacher Referral Bonus
Similarly, we’ve realized it’s time to adapt the way teacher referral bonuses work, so that the program more effectively drives referrals that are good for both teachers and the business. Under this new model, we're excited to share Skillshare will be investing more money into teacher referral bonuses than it did in the previous model. It’s just another example of how much we believe that investments in teacher success drive sustainable growth for both the community and company.
For many years, Skillshare offered teachers a flat $10 bonus for every new student they referred to Skillshare, regardless of whether this student became a paying member once their free trial ended and regardless of the amount paid to Skillshare. To better encourage referrals that lead to increased subscriptions and more royalties in teachers’ pockets, we will be changing the way we calculate teacher referral bonuses.
Effective April 1st, 2022, for every new student that a teacher refers, the teacher will earn a bonus equal to 60% of that student’s first subscription payment. For example, if a student pays the current U.S. rate of $167.88 for their first year of Skillshare membership, the teacher that referred them will receive a 60% share of that payment — that’s just over $100 as a referral bonus!
Will the bonus amount be the same for all referrals?
No, instead of the same bonus for every referral, teachers will now earn 60% of the first subscription payment made by any student they refer. This new bonus structure not only ensures that we encourage healthy referrals, but also enables sustainability and flexibility as we expand internationally.
As Skillshare grows into new international markets, we optimize our pricing for local markets. This means we can offer accessible, competitively-priced subscriptions in each region, ultimately encouraging more students to subscribe, watch your classes, and put royalties in your pockets. The new bonus payout structure allows us to adapt to this new flexible, international model.
How will I know how much I’ve earned in teacher referral bonuses?
To empower you in this new referral structure, we will be making updates to the Teacher Stats dashboard and Teacher Referrals dashboard at the same time the bonus changes go into effect, on April 1st. The new and improved dashboards will show you:
- The origin of your referrals, e.g. did they come from YouTube, or Instagram?
- The current status of each referral, e.g. paid, cancelled
- The bonus amount you may earn, or have already earned, for each referral
We’re super excited to roll out these updates to the teacher referral bonus program and the new stats you’ll have to empower your successful referring!
Thanks for reading through these coming updates to teacher payments at Skillshare! We are deeply invested in making Skillshare a healthy, sustainable creative community for both our students and our teachers. While these payment updates may feel substantial, we know our teacher community is ready to grow sustainably with us (as you always do!). As ever, we welcome your questions and feedback at email@example.com. For questions specific to Tipalti registration, please contact Tipalti at firstname.lastname@example.org and reference Skillshare.
*All dates are in U.S. Eastern time zone