Setting Up Your Gumroad Payouts
In order for us to protect you and your customers as a Gumroad creator, we need (what can seem like) a considerable amount of information from you. This article is here to make our sign-up process as transparent as possible so you can be certain your data is safe with us, and for you to understand why we need what we need.
You will find that the running theme in this article is Risk. Risk and its vast calculus dictate how everything in the payment processing world operates, and Gumroad is not spared its brutal gaze. The main thing to understand is: the less risk Gumroad assumes, the more things we can do with our platform, and the better the creator experience can be.
What type of account should I choose?
What you decide on entering here will be decided by how you file your taxes. Whether or not to get an EIN is a tax specific question that depends on what makes sense for you and your circumstances. Best thing to do would be to consult an accountant before making any big decisions.
If you are planning on selling products on Gumroad on behalf of your business, and you are registered as a business with the U.S. government, then you should choose the Business account. If you are selling as an independent creator, you should sign up as an Individual.
For more information on how to register as a business, check out this helpful blog by the Small Business Association.
How does Gumroad store my sensitive information?
Without going into too much detail, we encrypt all tax IDs and the last four digits of your SSN using public key encryption (2048-bit RSA), which is currently the strongest level of encryption available on planet Earth. Wikipedia does a pretty thorough job of explaining RSA here You can learn more about the incredibly complex strength of 2048-bit RSA encryption here. A great factoid to take from this article:
It is estimated that standard desktop computing power would take 4,294,967,296 x 1.5 million years to break a DigiCert 2048-bit SSL certificate. Or, in other words, a little over 6.4 quadrillion years.
Why does Gumroad need my contact information?
When you create an account on Gumroad and begin to sell goods, Gumroad assumes various types of risk - financial, reputational, and operational. The more risk Gumroad takes on, the higher the fees we need to charge our users in order to mitigate that risk. Thus, to keep our fees low and platform accessible to more creators, we need your contact information to verify with our banking partners that you are not a bad guy/guyette.
Your contact information will never be exposed to your customers, unless you specifically include it in the following:
Your Full Name
Your Email Address or Support Email
All of these are found in your Settings menu. None of these have to be tied to your actual name; feel free to be as private as possible when updating these.
What is a Tax ID / EIN and how do I figure out what mine is?
Note: If you're based in Canada, we'll ask for your Business Number (BN) instead of your EIN.
Your Tax ID/EIN is used by the US government (notably the IRS) identifies your business entity. Just like you have to include your Social Security Number (SSN) when filing your tax return, if you have a registered business in the US, you'll include your Employer Identification Number (EIN). You can find more information and even apply for an EIN (if you don't already have one) on the IRS's website. When applying for an EIN online, you'll be able to immediately receive this number. If you don't know whether or not you need an EIN, please consult an accountant.
The IRS does have "Open Hours" though, so make sure you apply between 7AM – 10PM Eastern time. We know, crazy.
Why does Gumroad need the last four digits of my Social Security Number and my DOB?
Note: If you're based in Canada, we'll ask for your Social Insurance Number instead of your Social Security Number.
We use this for the same reason we ask for your contact information - to make sure you haven't been naughty, and won't be naughty when you're using Gumroad.
While your Tax ID/EIN information help us verify that your business is in good standing and does not have a history of fraud, the last four of your SSN and DOB allow us to confirm that you yourself also have a clean history. To bring this back to risk - when we keep fraudsters off of the Gumroad platform, we all benefit.