How Do SaaS Affiliate Commissions Work? (Recurring vs One-Time)

How SaaS affiliate commissions work

An affiliate earns commission when someone they referred becomes a paying customer. A signup alone earns nothing. There are two ways to pay that commission: recurring, on the customer's payments over a period you set, or one-time, as a single amount.

Recurring commissions

The affiliate earns a percentage of every payment the referred customer makes during your commission period, for example 20% for 24 months. Some programs pay for the customer's whole lifetime.

How it works in practice

• An affiliate refers a customer who signs up for your $100/month plan.
• You pay 20% recurring for 24 months.
• The affiliate earns $20 for every monthly payment in that period.
• If the customer pays all 24 months, the affiliate earns $480 from that one referral.

Upgrades and extra seats the customer buys during the commission period earn commission too, unless you excluded that product from commission.

Why recurring commissions fit SaaS

Your revenue comes in month after month, so paying affiliates the same way ties their earnings to customers who stay. That works as a quality filter: affiliates who depend on retention promote you to people who are a real fit.

Common recurring structures

• A set percentage for a set period, for example 20% for 12 months. Established programs often pay 20 to 30% for 12 to 24 months; early-stage programs pay more and for longer.
• Lifetime, where the affiliate earns on every payment for the customer's whole lifetime. It looks great on paper, but it mostly comes from early-stage companies that have to work harder to recruit. For an affiliate, a capped term on a product with low churn is often worth more than lifetime on a product whose customers leave within a year.
• Tiers, where affiliates move to a higher percentage or a longer period once they bring in more paying customers. See tiered commission structures.

One-time commissions

A one-time commission pays an affiliate once for a referred customer, however long that customer stays. It's simpler to forecast, but nothing in the affiliate's pay depends on whether the customer sticks around. And a one-time amount that's bigger than the customer's first payment invites fake signups.

One-time payments work best as bonuses on top of a recurring commission: for a published article, say, or for reaching a number of paid referrals. That's what campaigns are for. For a one-off reward outside a campaign, you can add a one-off commission.

Which model should you choose?

For most B2B SaaS companies, recurring commissions win:

• Affiliates stay active longer, because their income grows with every customer they add.
• Referral quality goes up, because affiliates earn more from customers who stay.
• It matches your economics: your revenue is recurring, so your commission can be too, and you only pay out of payments you've actually received.
• Affiliates can see what you're worth to them. Your program's landing page has a commission calculator, and marketplace listings show your average revenue per account, so affiliates run this math on you before they apply.

How commissions work in Reditus

1. Tracking: a click on an affiliate link sets the Reditus cookie, and when the visitor signs up, the signup snippet records the referral.
2. Payments: the referred customer's payments come in through your Stripe connection, or through the Payments API if you use another processor. Reditus matches them to the referral.
3. Calculation: Reditus calculates the commission on every payment within the commission period, based on your commission settings.
4. Payout: commissions earned in a month go into a payout on the 1st of the following month, once the affiliate's commissions in your program pass your payout threshold. Reditus pays your affiliates for you once you've paid the monthly payout overview. Automated payouts are on every plan; the payout fee (5% by card, 2% by invoice) comes on top of the commissions.
5. Refunds: any refund, full or partial, automatically rejects the full commission on that payment, whether you refund in Stripe or send the refund to the Payments API refund endpoint.

There's no setting to hold commissions for a period. If you want a specific payment held longer, for example a very large commission you'd rather not pay out until you're sure there's no refund, we can do that by agreement with you.

Settings to decide before you launch

• Commission percentage and duration: most B2B SaaS programs pay between 20 and 50%. Check what one paying customer earns an affiliate: an affiliate needs roughly $10 for every payment before promoting you is worth their time. More in what is a good commission rate in B2B SaaS.
• Cookie window: how long after a click a signup still counts. New programs start at 60 days; many programs use 30. You can set anything from 1 to 365 days.
• Payout threshold: the amount an affiliate's commissions in your program must reach before a payout goes out. New programs start at $100. We recommend setting it so an affiliate gets paid after two to three commissions. More in which payout threshold to use.
• Tiers: public tiers promote affiliates automatically once they reach a number of paid referrals; private tiers are invite-only, for example for agencies. See how to set up multiple tiers.
• Excluded products: you can exclude certain products from commission, for example onboarding or service fees, by adding metadata to them in Stripe. See how to exclude products from commissions.