A flat fee pays a creator an agreed amount for defined work. Commission pays them according to an agreed outcome, such as eligible sales. A hybrid combines a base fee with performance-linked pay. The right choice depends on what you are buying, who controls distribution and whether both sides can verify the result.
A low upfront creator bill can look attractive. It does not tell you what the campaign will cost, whether the offer is worthwhile for the creator or whether the content will make money.
Before choosing a payment model, separate three purchases: making the video, licensing its use and putting it in front of customers.
Start with what the creator is being hired to do
“UGC campaign” can describe different jobs.
A creator might produce a video for your brand to run as an ad. They might publish a sponsored post to their own audience. They might do both, with commission attached to qualifying orders.
Those jobs should not share a vague instruction to “make content that sells.”
In a content-only ad brief, define the creator's filming, delivery and revision responsibilities. Your team may control the offer, landing page, media budget, targeting and whether the video runs at all. That distinction matters when deciding how much of their pay should depend on sales.
Write down the deliverables first:
- The number of finished videos and alternative openings.
- Whether raw footage is included.
- Whether the creator must publish anything themselves.
- The permitted advertising use and its duration.
- The review process, revision allowance and payment trigger.
Our UGC brief template turns those decisions into a working document. Agree the work before negotiating a percentage.
Flat fee, commission and hybrid compared
These definitions are consistent with impact.com's explanation of creator compensation models. They describe the payment structure, not a standard price or universal contract.
| Model | What sets the creator's pay? | What the brand needs to manage |
|---|---|---|
| Flat fee | A fixed amount for the agreed work, subject to the agreed payment milestones | Production scope, acceptance, licensing and the risk that the creative does not perform |
| Sales commission | A percentage of qualifying sales under stated tracking rules | Attribution, exclusions, refunds, reporting, distribution and payout timing |
| Hybrid | A fixed component plus commission or another agreed performance component | Everything above, including when each component becomes earned |
Flat fee: a defined production purchase
A flat fee is a useful option when you need specific assets and can assess whether they meet a brief.
It gives the creator a known amount for the agreed work. It also means the brand cannot expect the fee to disappear because an accepted video performs poorly.
Fixed does not necessarily mean prepaid. A deposit, delivery milestone, approval condition and payment deadline are separate terms. Spell them out.
Pay particular attention to acceptance. “We pay if we like it” leaves room for disagreement about work that followed the brief. Use observable criteria: correct product, agreed shots, accurate claims, usable audio and the specified files. Agree how changes or cancellation will be handled too.
Commission: variable pay needs verifiable rules
Commission makes compensation depend on qualifying outcomes. In a sales-based deal, that means defining which orders count and what amount the percentage applies to.
This can offer upside. It can also produce little or no creator income if the campaign does not run, customers do not buy or orders do not qualify under the agreement.
A creator providing a file for brand-run ads has a different level of distribution control from a creator promoting an affiliate link to an audience they built. Do not treat those as interchangeable arrangements.
If you propose commission-only work, make the uncertainty visible. Explain the planned distribution, what is and is not committed, the reporting available and what happens if you never launch the creative. A free sample is not a guarantee of earnings.
Hybrid: pay for the work, then define the upside
A hybrid can pay a base amount for agreed production and add commission for eligible sales.
That structure lets you separate two questions:
- What are we paying for the work and rights we need?
- What additional reward applies when the agreed outcomes occur?
Hybrid does not automatically mean fair. A token base, unclear commission rules or an open-ended licence can still create a poor deal. Review the scope and risk together rather than judging the offer by its label.
A worked example: the same videos, three pay models
Consider a fictional brand buying the same three-video package under three possible agreements.
Every number below is an illustration, not a market-rate recommendation, forecast or Myah pricing example. We assume identical deliverables and usage rights so that only the payment structure changes.
The assumptions:
- Each qualifying order leaves $60 of product revenue after discounts, excluding tax and customer shipping charges.
- All orders shown are retained; there are no refunds in this simplified example.
- Product, fulfilment and other variable order costs total $24 per order.
- That leaves $36 per order before advertising and creator compensation.
- Media spend for the test is $900.
- The three alternatives are $600 flat, 10% of eligible product revenue, or $300 plus 5%.
Here is what the creator would earn:
| Qualifying orders | Eligible revenue | $600 flat | 10% commission | $300 + 5% |
|---|---|---|---|---|
| 10 | $600 | $600 | $60 | $330 |
| 50 | $3,000 | $600 | $300 | $450 |
| 100 | $6,000 | $600 | $600 | $600 |
At ten orders, the commission-only arrangement creates the smallest creator bill. It also gives the creator only $60 for the entire agreed package.
At 100 orders, all three happen to pay $600. That crossing point comes from the numbers we chose; it is not a general rule. Above it, the commission and hybrid payouts exceed the fixed fee.
Now include the brand's other costs:
Contribution after media and creator pay = qualifying orders × $36 − $900 − creator compensation
| Qualifying orders | Flat-fee model | Commission model | Hybrid model |
|---|---|---|---|
| 10 | −$1,140 | −$600 | −$870 |
| 50 | $300 | $600 | $450 |
| 100 | $2,100 | $2,100 | $2,100 |
All three lose money at ten orders. Paying on sales did not remove the cost of buying attention or supplying the product.
This is a simplified contribution calculation, not net profit or proof that the campaign caused those orders. It excludes overhead, sample shipping, separate platform fees and any costs not included in the stated assumptions. Add the real costs of your program before using the model to make a spending decision.
The exercise is useful because it shows both sides of the offer. The brand can see its downside; the creator can see how much sales uncertainty they are being asked to accept.
Define the commission base before the percentage
“Ten per cent of sales” is incomplete.
Does it include tax? Shipping? Discounts? A partially refunded order? What if a customer clicks one creator's link and later uses another creator's code?
Even familiar reporting labels need care. Shopify defines net sales as gross sales minus discounts and sales reversals. That reporting definition does not automatically become the definition in your creator agreement.
Use a written calculation that both parties can understand. For example:
Illustrative contract calculation, not Shopify's reporting definition: 10% of the eligible product amount after agreed discounts and refunds, excluding tax and shipping. Define separately how cancellations, partial refunds and other adjustments affect commission.
That is only the calculation base. The agreement still needs to define eligibility, attribution and timing.
A practical pay-rules sheet should answer:
| Question | Decision to record |
|---|---|
| What earns payment? | Delivery, approval, a qualifying sale or a combination |
| Which sale qualifies? | Products, customer types, territories and order statuses included |
| How is credit assigned? | Tracking method, attribution window and link/code conflict rules |
| Which report controls? | The agreed source of truth and what the creator can inspect |
| What reduces commission? | Refunds, cancellations, fraud and other stated exclusions |
| When is money payable? | Review/hold period, payout schedule and minimums if any |
| Is there a cap? | Amount, scope, notice and what happens to advertising when reached |
| What can change? | Rules for future rate changes, existing work and disputes |
A payout cap needs a plan for ongoing usage. If the brand keeps advertising after the creator can no longer earn, the agreement should explain what rights and compensation cover that period. Do not hide the answer in an undefined “performance-based” promise.
Attributed revenue is not the same as additional revenue
You need attribution to administer a commission program. You need a broader measurement plan to decide whether the marketing is creating profitable growth.
Shopify's attribution documentation shows how different models assign credit. First click and last click can credit different interactions in the same customer journey.
An order credited to a creator's link answers a tracking question under your chosen rules. It does not, by itself, prove the customer would not have bought without the campaign. Incrementality concerns that additional effect; IAB and IAB Europe's measurement guidance treats it as a causal measurement problem.
Keep the distinction practical:
- Creator payments: apply the agreed tracking rules consistently.
- Brand investment decisions: examine contribution, customer mix and an appropriate testing approach, including controlled experiments where feasible.
Use the agreed rules to decide when commission is earned. Keep incrementality analysis separate from payout administration rather than introducing it as an unstated condition for paying creators. Any adjustments must follow the agreement.
Which model should you start with?
Our recommendation for a brand buying defined ad assets is to start the discussion with a clear production scope and a fixed component. Then assess whether commission adds a credible incentive for this particular program.
That is a starting point for negotiation, not a universal industry rule.
A flat-fee pilot can make sense when the work is tightly scoped and sales tracking is not ready. A hybrid is worth discussing when you want repeat creative and can show reliable, understandable reporting. Commission-only requires especially careful treatment of creator risk, distribution expectations and the possibility of zero earnings.
Before sending an offer, check whether you can explain it without using the phrases “huge exposure” or “unlimited upside.” If the expected work is concrete but the compensation is mostly a promise, improve the offer.
Common questions
Does a flat fee include unlimited ad usage?
Only if the agreement grants that scope. Payment structure and usage rights are separate decisions. Read our guide to UGC usage rights and partnership-ad permissions before assuming a video fee buys every future use.
Is commission cheaper than paying a flat fee?
It can create a smaller creator bill at lower eligible revenue and a larger one at higher revenue. Neither result tells you whether the campaign is profitable. Include media, product, fulfilment, samples and applicable fees.
Can we combine a flat fee with commission?
Yes, if both sides agree. Define the base payment's trigger separately from the commission calculation, hold period and payout schedule.
What is a fair UGC commission rate?
There is no rate established by this guide. Evaluate the requested production work, rights, expected distribution, margins, reporting and creator downside. A percentage without those details is not enough to assess an offer.
Put the rules on the page before filming starts
A workable creator program lets both sides answer: what work is required, what can be earned, how it is measured and when it is paid.
Myah is building a performance-UGC marketplace for brands and creators. Join brand early access for updates from Myah. Early access is not a promise of campaign results or immediate creator availability.
