How much commission should a SaaS business pay partners?
Updated · ThreeCommas
Short answer
Most software businesses pay affiliates 20 to 30% of each payment for 12 months, resellers 20 to 30% for the life of the account, and commission-only sales reps 15 to 25% for 6 to 12 months. Start from what a new customer is worth to you, then pay a share that still leaves you a healthy profit.
Start from what a customer is worth
Work out roughly how much a typical customer pays you over the whole time they stay. If they pay $50 a month and stay two years, that is $1,200.
Decide how much of that you would happily spend to win the customer. Many software businesses spend 20 to 35% of a customer's lifetime value on winning them. On $1,200, that is $240 to $420.
A partner commission of 25% for 12 months on $50 a month is $150. That is well inside the budget, and you only pay it when the customer actually pays.
Typical rates by type of partner
These are common ranges for software businesses. Your market may differ; the live listings on ThreeCommas show what businesses like yours offer right now.
| Partner type | Typical share | Typical length |
|---|---|---|
| Affiliate, creator, newsletter | 20 to 30% | 12 months |
| Reseller or agency | 20 to 30% | Lifetime of the account |
| Commission-only sales rep | 15 to 25% | 6 to 12 months |
| Warm introductions | 10 to 20% | 12 months |
| Launch partner for a country | 15 to 25% | 24 months |
| Growth or SEO partner (above a baseline) | 10 to 20% of growth | 6 to 12 months |
How long to pay for
Recurring commission (a share of every payment) is the standard for software, because your income is recurring too. One-off bounties are simpler but attract fewer serious partners.
Lifetime commission is the strongest offer. It makes sense when customers stay a long time and when partners keep helping, as agencies often do. If you are unsure, start with 12 months; you can always offer more to your best partners.
Protect yourself
Pay on money received, not on sign-ups. Hold commission for 30 days so refunds can be taken back. Cap the commission per customer if you have very large accounts. ThreeCommas does all three by default.
Questions
Is 30% commission too high for SaaS?
Not usually. Software has high margins, and 30% for 12 months is a common affiliate offer. Check it against what a customer is worth to you over their lifetime.
Should I pay a flat fee or a percentage?
A percentage of each payment is the norm for subscriptions, because it scales with the customer's value. A flat fee per customer suits products with one fixed price.