How to pay affiliates: schedules, methods, fees and tax forms

Pick a payout schedule

A payout schedule has two parts: how often you pay, and how long after a period closes the money goes out. Monthly is by far the most common frequency. It keeps the admin work to one run a month and gives affiliates a predictable date to expect money.

The second part is the payment term, written as net-15 or net-30: the number of days after the period closes by which you pay. Net-15 means commissions approved in March are paid by 15 April.

Whatever you pick, publish it in your partner terms and stick to it. Paying late is the fastest way to lose an affiliate’s trust, and an affiliate who has to chase you for money stops promoting you. Our guide to affiliate program terms covers how to write this clause.

Set a minimum payout threshold

A minimum payout stops you from sending a $3.80 transfer that costs more in fees and admin time than it is worth. Balances under the minimum roll over to the next period until they pass it.

Thresholds of $25 to $100 are common. Set yours from the cheapest transfer you offer: if an international bank transfer costs you a meaningful fixed fee, the minimum should be high enough that the fee is a small share of the payout. Keep it low enough that a partner with a handful of referrals reaches it within a few months, or they will conclude the program does not pay.

• State that balances below the minimum carry over and are never forfeited while the partner is active.
• Decide what happens when a partner leaves with a balance under the minimum. Paying it out on request is the fair default.
• Deduct clawbacks before checking the minimum, so a partner whose refunds push them below it simply waits another period.

Choose payout methods

Offer one or two methods that suit where your affiliates live, and let each partner choose. Fees and limits change often, so check each provider’s current pricing page rather than relying on figures in any guide, including this one.

Collect payout details before the first payment and ask partners to keep them current. Send payments only to details the partner entered themselves, and treat a sudden change of payout account shortly before a payout run as a reason to confirm by another channel first.

Affiliatops does not send the money itself. It works out what each partner is owed, builds the payout list, and shows you where each partner wants to be paid; you approve it and pay through PayPal, Wise, bank transfer or an e-wallet the way you already do. If you need payouts sent from inside the tool, our Rewardful comparison is candid about that difference.

Currencies and fees

Pay in the currency your program tracks commissions in, and let the payout provider convert to the partner’s local currency. Converting yourself first means two conversions and two sets of fees.

Decide who absorbs transfer and conversion fees, and write it down. There are two common approaches:

• You pay the fees, so the partner receives exactly the commission shown in their portal. Simple, and partners appreciate it; budget for it in your commission rate.
• The partner pays the fees, which are deducted from the amount received. Common with PayPal and international wires; the minimum payout keeps fees from swallowing small payments.

Either way, the partner should be able to see the gross commission, any deductions such as clawbacks, and the net amount sent. That is what the invoice is for.

Tax forms and invoices

US businesses commonly collect a tax form from every affiliate before the first payout:

The 1099-NEC threshold was $600 per year for a long time, but it changes for payments made after 2025 under recent US law, so check the current IRS threshold for the year you are filing. Payments made through a payment card or a third-party network such as PayPal are generally reported by that network on Form 1099-K instead, and not on your 1099-NEC; confirm how this applies to your setup with your accountant.

Outside the US, requirements vary. Partners who are VAT- or GST-registered businesses may need to issue you an invoice with tax, or you may need to account for reverse-charge VAT. Keep an invoice for every payout either way: it is your record of what was paid, to whom, for which commissions, and it is what an auditor will ask for.

Run and reconcile each payout

A monthly payout run takes an hour or less once it is routine. The order matters, because each step depends on the one before it:

1. 1

   Close the period

   Take commissions that finished their hold period by the cut-off date. Anything still pending waits for the next run.

2. 2

   Deduct clawbacks

   Subtract refunds and chargebacks on commissions you already paid. See our guide to affiliate refunds and clawbacks.

3. 3

   Apply the minimum

   Drop partners whose net balance is below the minimum and carry their balance forward.

4. 4

   Check before you pay

   Confirm tax forms are on file, payout details are unchanged, and scan for unusual spikes from one partner.

5. 5

   Approve and send

   Approve the payout list, then pay each partner through their chosen method.

6. 6

   Mark paid and issue invoices

   Record each payment, attach the invoice, and let partners see it as paid in their portal.

7. 7

   Reconcile

   Match every transfer in your PayPal, Wise or bank statement to a payout and invoice, so the totals agree.

Reconciliation is what catches the mistakes: a transfer that bounced, a payment sent twice, a fee you did not expect. Do it the same week you pay, while the details are fresh, and keep the invoices and transfer references together for your accountant.

Frequently asked questions