Affiliate payout terms explained: net-30, thresholds and reversals

A commission is not money yet. Between the sale and your bank account it passes through a pending period, an approval, a payment schedule and a minimum balance, and each of those is set in the program's payout terms.

Two programs with the same commission can pay you months apart. This guide explains each part of the payout terms and what to check before you join.

Pending, approved, paid

A commission usually moves through three states:

1. Pending. The sale is tracked, but the program waits before approving it, mostly so refunds and cancellations can come through first.
2. Approved. The waiting period has passed and the sale did not break any rule. The commission is now owed to you.
3. Paid. The approved amount went out on the next payment date, once your balance cleared the minimum.

The waiting period is often called the approval, locking or validation period. It is usually at least as long as the product's refund window. A product with a 60-day money-back guarantee will rarely approve commissions in less than 60 days.

What net-30 means

"Net-30" means the program pays an approved commission within 30 days of the end of the period it was approved in. Net-60 and net-90 work the same way with longer delays.

Put together with the pending period, the real delay is longer than the label. A sale made at the start of a month, held for a 30-day approval period, then paid net-30 after the month it was approved in, can reach you about two months after the sale. When a program says "paid monthly", check whether that is monthly from the sale or monthly from approval.

Minimum payout thresholds

Most programs only pay once your approved balance passes a minimum. Below it, the balance usually rolls over to the next period.

The threshold matters more than it looks when you are starting out. A program with a high minimum and a low commission can hold your money for many months before paying anything. Networks help here, because they combine your earnings from every program you run through them into one balance.

Payment methods and what they cost

The usual options are bank transfer, PayPal, wire transfer, and in some programs Payoneer, cheque, store credit or gift cards. Two costs hide here:

• Fees. International wires and some payment platforms charge fees per payment, sometimes on both ends. On small payouts a fixed fee takes a large share.
• Currency conversion. A program paying in US dollars into a euro account converts at someone's rate, usually not a generous one.

Store credit and gift cards are not cash. Count them only at what you would actually spend.

Reversals and clawbacks

An approved commission can still be taken back in some programs, usually for fraud or chargebacks found later. Before approval, the common reasons for a reversal are:

• refunds, returns and cancelled orders;
• self-referrals (buying through your own link);
• promotion the program forbids, such as bidding on its brand name in search ads, or posting coupon codes it did not give you;
• duplicate or fake leads.

The terms page lists what the program counts as a breach. Read it once, because a breach can cost more than the one sale, sometimes the whole account balance. How to read an affiliate agreement shows which clauses to look for.

Tax forms

Programs run by companies in the United States usually ask for a tax form before paying: a W-9 from US persons, a W-8BEN from individuals outside the US. Without it, payments may be held or have tax withheld. Other countries have their own rules, and how you declare the income is between you and your tax authority.

What happens to commissions below the minimum payout?

In most programs they roll over to the next payment period and are paid once your balance passes the threshold. Some programs expire balances on inactive accounts after a long period, so check the terms if you stop promoting a program.

Checking payout terms before you join

Note four things from the program's own terms page: the approval period, the payment schedule, the minimum, and the payment methods with their fees. Every program listing in this directory shows the payout terms we could read from the company's page, with a link to where we read them. Compare them alongside the commission type and the cookie window, or start from how affiliate programs work for the whole picture.