The Science of Commission Rates
Choosing an affiliate commission rate is often treated as a guessing game. Many founders simply copy their competitors (usually 20% or 30%) without understanding the unit economics behind those numbers.
This Affiliate Commission Rate Calculator flips the script. Instead of picking a random percentage, we start with your financial constraints—your margins, churn, and risk tolerance—to back into the maximum rate you can afford.
LTV:CAC Ratio
The golden rule of SaaS is a 3:1 ratio. You should aim to earn 3x more from a customer (calculate this with our LTV Calculator) than it cost to acquire them.
Payback Period
How long are you willing to wait to break even? Shorter periods (3-6 months) protect cash flow but limit growth speed.
Margin Impact
Affiliate commissions come directly out of your margin. High-margin software businesses can afford to be more generous than low-margin services.
RevShare vs. Bounty (CPA)
This calculator provides suggestions for both models.
- Recurring %:Best for SaaS. It aligns you and the affiliate. If the customer churns in month 2, you stop paying commissions. Risk is low.
- One-time Bounty:Best for cash-hungry affiliates (like paid media buyers). You pay a flat fee (e.g., $100) upfront. Risk is higher because you pay even if the customer churns immediately.