# How to pay affiliates: a complete guide for SaaS companies

Payout methods, schedules, refunds and tax forms, and when to stop paying partners by hand.

By Damjan, Growth at Tolt · Published 2025-11-29 · In Payments & tax, on the Tolt Blog

Source: https://tolt.com/blog/how-to-pay-affiliates

## The short version

- Offer PayPal plus at least one alternative, such as Wise or Payoneer, for affiliates abroad.
- Pay monthly on NET-30 with a $50 to $100 minimum, and take the commission back automatically when a customer refunds.
- Collect W-9s from US affiliates and W-8BENs from everyone else; a US affiliate you pay $2,000 or more in 2026 gets a 1099-NEC.

You've launched your affiliate program. Affiliates are sending you customers. Now comes the part that makes or breaks your program: actually paying them.

Get payouts wrong, and your best affiliates will leave for competitors. Get them right, and you'll build a loyal network that keeps driving revenue.

This guide covers everything SaaS founders need to know about paying affiliates: payment methods, payout schedules, tax requirements, and how to automate the whole process.

## How affiliate payments work

![Affiliate payment flow from referral to payout](https://tolt.com/blog/posts/how-to-pay-affiliates/tolt-program.webp)

Before diving into the how, let's understand the basics.

**The flow**

1. **Affiliate** refers a customer using their unique link
2. **Customer** signs up and pays for your product
3. **Commission** is calculated based on your program terms
4. **Commission** enters a "pending" status during the payout term
5. After the payout term, **commission** becomes "approved"
6. **You pay the affiliate** via their preferred method

**Why the waiting period?** SaaS subscriptions have refunds and chargebacks. If you pay affiliates immediately and a customer gets refunded, you've overpaid. The waiting period (typically 30-60 days) protects you from this.

## Affiliate payment methods

![Payment method options: PayPal, Wise, bank transfer, and crypto](https://tolt.com/blog/posts/how-to-pay-affiliates/payment-methods.webp)

Your affiliates are global. They need flexible payment options.

### PayPal

**Pros**

- Most widely used, affiliates already have accounts
- Instant transfers in most countries
- PayPal Mass Payments for bulk payouts
- Easy to use

**Cons**

- Fees can be significant (2.9% + fixed fee)
- Account freezes happen
- Not available in all countries

**Best for:** Small to medium programs, affiliates in developed countries

### Wise (TransferWise)

**Pros**

- Lower fees than PayPal (often 0.5-1%)
- Real exchange rates for international transfers
- Batch payment feature for bulk payouts
- Fast international transfers

**Cons**

- Less widespread than PayPal
- Some affiliates unfamiliar with it

**Best for:** International affiliates, cost-conscious programs

### Payoneer

**Pros**

- Popular with international affiliates
- Local bank transfers in 150+ currencies
- Prepaid Mastercard option
- Good for emerging markets

**Cons**

- Setup can be complex
- Fees vary by withdrawal method

**Best for:** Affiliates in emerging markets, high-volume international programs

### Direct bank transfer (ach/wire)

**Pros**

- No intermediary fees (for ACH)
- Direct to affiliate's account
- Professional appearance

**Cons**

- Wire fees can be expensive ($25-50)
- ACH only works domestically (US)
- Requires collecting bank details

**Best for:** High-value affiliates, domestic (US) programs

### Cryptocurrency

**Pros**

- No borders or banking restrictions
- Fast transfers
- Appeals to tech-savvy affiliates
- Lower fees for large amounts

**Cons**

- Price volatility
- Tax complexity
- Not all affiliates want crypto

**Best for:** Tech/crypto niches, affiliates in countries with banking restrictions

## Manual vs. automated payouts

![Manual vs automated payouts comparison](https://tolt.com/blog/posts/how-to-pay-affiliates/tolt-process.webp)

### Manual payouts

You calculate commissions, generate a payout file, and process payments yourself.

**How it works**

1. Export pending payouts from your affiliate software
2. Review and approve commissions
3. Upload CSV to PayPal Mass Payments or Wise Batch Payment
4. Process the transfer
5. Mark payouts as completed

**Pros**

- Full control over every payment
- Can review for fraud before paying
- No additional processing fees

**Cons**

- Time-consuming (especially as you scale)
- Easy to make mistakes
- Affiliates wait longer for payment

**Best for:** Early-stage programs, founders who want hands-on control

### Automated payouts

Your affiliate software handles everything automatically.

**How it works with Tolt**

1. On the 15th of each month (or your custom date), Tolt generates an invoice for all pending commissions
2. You pay the invoice by bank transfer or card
3. Tolt pays each affiliate by the method they chose: PayPal, Wise, local bank, wire or crypto
4. Tolt sends invoices to affiliates and handles tax documentation

**Pros**

- Set it and forget it
- Affiliates get paid reliably and on time
- No need to maintain PayPal/Wise/Payoneer accounts yourself
- Tax forms (1099, W-9, W-8) handled automatically

**Cons**

- Small processing fee (2% with Tolt)
- Less manual control

**Best for:** Growing programs, founders who want to focus on product instead of payouts

*[A product scene in the page: A payout run in Tolt: you pay one invoice, and Tolt pays every partner on it.]*

## Setting up your payout terms

![Payout schedule timeline showing NET-15, NET-30, and NET-60 intervals](https://tolt.com/blog/posts/how-to-pay-affiliates/payout-schedule.webp)

### Payout schedule

Common options:

**NET-15:** Pay 15 days after commission is earned

- Faster payments, affiliates love it
- Higher risk of paying before refunds

**NET-30:** Pay 30 days after commission is earned

- Industry standard
- Good balance of speed and protection

**NET-60:** Pay 60 days after commission is earned

- Maximum protection from refunds/chargebacks
- Some affiliates may find this too slow

> **Recommendation:** Start with NET-30. It's what affiliates expect and gives you enough buffer for most refund requests.

### Minimum payout threshold

The minimum amount an affiliate must earn before receiving payment.

**Common thresholds**

- $25 (low barrier, more frequent small payments)
- $50 (balanced)
- $100 (fewer transactions, more efficient)

**Why set a threshold?** Processing many tiny payments is expensive and time-consuming. A $5 payout that costs $1 to process doesn't make sense.

> **Recommendation:** $50-$100 is reasonable for most SaaS programs. Tolt's default is $100, which you can customize.

## Handling refunds and chargebacks

This is critical. If you don't handle refunds properly, you'll overpay affiliates.

**Best practice**

- When a customer refunds, automatically debit the commission from the affiliate's balance
- Track this transparently so affiliates can see what happened
- Set your payout term long enough to catch most refunds (30 days minimum)

> **How Tolt handles it:** As soon as Stripe or Paddle notifies Tolt that a customer has canceled or refunded, Tolt stops tracking payments for that customer and debits the commission from the appropriate affiliate. You never overpay.

## Tax considerations for affiliate payments

![Tax documentation: W-9, W-8BEN forms and 1099 filing](https://tolt.com/blog/posts/how-to-pay-affiliates/tolt-tax.webp)

This is where many SaaS founders get nervous. Don't skip this.

### For US-based programs

**If you pay a US affiliate $2,000 or more in a calendar year**

- You must file a 1099-NEC form with the IRS
- You need to collect a W-9 form from the affiliate before paying

> **New for 2026:** The threshold was $600 for years. For payments made from January 1, 2026 it’s $2,000, and it rises with inflation from 2027 ([IRS instructions for Form 1099-NEC](https://www.irs.gov/instructions/i1099mec)).

**If you pay non-US affiliates**

- Collect a W-8BEN form
- Generally no US tax withholding required (but consult a tax professional)

### Collecting tax forms

**W-9 (US affiliates):** Collects their legal name, address, and Tax ID (SSN or EIN)

**W-8BEN (non-US affiliates):** Certifies they're not a US person for tax purposes

**When to collect:** Before the first payout, or at minimum before year-end

*[A product scene in the page: Every partner’s tax form, the right one for who they are: a partner who hasn’t signed waits until she does.]*

### Automating tax compliance

This is painful to do manually. Every Tolt plan includes:

- Automatic W-9/W-8 collection from affiliates
- 1099 filing at year-end
- Individual invoices sent to each affiliate

If you're doing this manually, consider using a service like Trolley or Tipalti for tax compliance at scale.

## Step-by-step: paying affiliates with Tolt

### Option 1: pay partners yourself

1. **Go to Payouts** in your Tolt dashboard
2. **Review pending payouts** for the current period
3. **Generate payout file** (CSV format)
4. **Upload to PayPal Mass Payments** or **Wise Batch Payment**
5. **Process the transfer** in PayPal/Wise
6. **Mark as paid** in Tolt

### Option 2: auto payouts

1. **Enable auto payouts** in your Tolt settings
2. **Set your payment method** (bank transfer or card)
3. **Configure payout date** (default: 15th of each month)
4. Each month, **receive an invoice** from Tolt
5. **Pay the invoice**, and Tolt handles the rest
6. Affiliates receive payment via their preferred method

That's it. Tolt sends invoices to affiliates, collects tax forms, and files 1099s automatically.

## Key takeaways

**Payment methods:** Offer at least PayPal and one alternative (Wise or Payoneer) for international affiliates.

**Payout terms:** NET-30 is the sweet spot. Long enough to catch refunds, short enough to keep affiliates happy.

**Minimum threshold:** $50-$100 reduces administrative overhead without alienating small affiliates.

**Refund handling:** Automatically debit commissions when customers refund. Don't overpay.

**Taxes:** Collect W-9s from US affiliates, W-8BENs from international. File 1099s for US affiliates you pay $2,000 or more in a year (from 2026).

**Automation:** Manual payouts work early on, but auto payouts save significant time as you scale.

## Questions

### How often should I pay affiliates?

**Monthly is standard.** Some programs pay weekly or bi-weekly, but this creates more administrative work. Monthly payments with NET-30 terms are what most affiliates expect.

### What if an affiliate disputes a commission?

Review the tracking data. Check if the referred customer actually converted and if the attribution is correct. If there's a legitimate error, adjust manually. If not, explain your tracking methodology to the affiliate.

### Do I need to pay affiliates in their local currency?

Not necessarily. USD is widely accepted. But services like Wise and Payoneer can convert to local currency at good rates, which affiliates often appreciate.

### What happens if an affiliate doesn't have PayPal?

Offer alternatives. Wise and Payoneer are good options for international affiliates. Some programs also offer direct bank transfers for high-value affiliates.

### How do I handle taxes for international affiliates?

Collect a W-8BEN form from non-US affiliates. This certifies they're not subject to US tax withholding. You generally don't need to withhold or report payments to non-US individuals, but consult a tax professional for your specific situation.

### Should I issue 1099s to all affiliates?

Only to US-based affiliates you paid $2,000 or more in a calendar year (for payments from 2026; it was $600 before). For non-US affiliates, collect W-8BEN forms but you typically don't file 1099s.

### What if an affiliate wants to be paid in crypto?

If your program supports it, great. Make sure to:

- Document the USD value at time of payment for tax purposes
- Use a stablecoin (USDC) to avoid volatility issues
- Be aware of additional tax complexity for both parties

In Tolt, crypto is a payout method partners can choose, alongside PayPal, Wise, local bank and wire.

### Can affiliates choose their payment method?

Yes, and they should. Let affiliates select their preferred method in their portal. This reduces friction and complaints.

### What's a reasonable processing fee for auto payouts?

2-3% is typical for managed payout services. Tolt charges 2% for auto payouts. Compare this to doing it yourself: PayPal fees (2.9%+), your time managing payouts, and the cost of tax compliance.

### How do I prevent affiliate fraud?

- Set reasonable payout terms (NET-30 or longer) to catch suspicious activity
- Review unusually high-performing affiliates manually
- Use affiliate software with fraud detection
- Monitor for patterns like high clicks with zero conversions