RefficksBlog

How to pay affiliates: schedules, minimums, tax forms and refunds after payout

By The Refficks team · · 12 min read

The first payout is the moment partners decide whether you are trustworthy, and what costs you that trust is a surprise: a partner who expected money and got none, a payout lower than the dashboard said with no line explaining why, or a payday that came and went without a word.

Each of those is avoidable, and the decisions that avoid them are made before the first payout rather than on the day. This guide expands step 8 of how to start an affiliate program: the five decisions to make first, the tax forms, the payout-day routine, how to tell partners who is not being paid and why, and what partners should be able to see. There are two templates and a checklist at the end.

This is not tax advice. The tax section is the list of questions to take to your accountant, with the official sources behind each one.

Five decisions to make before the first payout

1. The schedule and the cut-off

Pick a payday and a cut-off, and write both down: "commission approved by the last day of the month is paid on the 15th of the next." The days between the cut-off and payday are your working time, for checking the batch, sorting out anyone who cannot be paid, and sending.

Monthly is the simplest schedule to keep. Paying twice a month helps partners who depend on the income, but it doubles the routine below, so only promise it if you can keep it every time. A late payout costs more trust than a slower schedule that is always on time.

Add the holding period to the wait. If commission is approved 35 days after an order (see affiliate commission structures for how long a hold should be), the schedule above means:

  • An order on March 3 is approved on April 7, falls in April's period, and is paid on May 15: 73 days after the order.
  • A commission approved on the last day of a month is paid 15 days later, 50 days after the order. One approved on the 1st waits about six weeks for the next payday, about 80 days after the order.

So the honest answer to "when do I get paid for this sale?" is "between about 50 and 80 days after the order". Partners can plan around a range they were told. They cannot plan around one they have to work out.

2. The minimum, per currency

A small transfer can cost more in fees and time than it moves. Set a minimum, and let balances under it carry over to the next payout rather than disappearing.

Set it per currency. $50 is a sensible minimum in dollars and a meaningless one in yen, where the same figure is a fraction of a dollar. Keep it low enough that a partner with a handful of sales reaches it within a few months, and decide now what happens to a balance under the minimum when a partner leaves: paying it on request costs little and ends the relationship well.

3. The method

Bank transfer, PayPal, Wise, or store credit for partners who are also your customers. Each method you offer is another set of details to collect, another fee table and another way for a payment to fail, so start with one or two.

Decide who pays transfer fees, and say so. If you sell in more than one currency, decide whether partners are paid in the currency of the sale or converted, at which rate and on which day; the commission structures guide covers this too.

4. The tax forms you collect, and when

Collect them at signup or before the first payout, never after it. A missing form discovered in January is a hard conversation with a partner you paid all year. See the tax section below.

5. What a refund after payout does

A refund or chargeback can arrive after the commission on that order was paid. Record a reversal and take it from the partner's next payout, as a line beside the original sale, never as a silent change to the original. If a partner was paid $59.80 in May and the order is refunded in June, June's payout is $59.80 lower. If June's earnings are only $40.00, the remaining $19.80 carries into July. Decide too what happens if the balance never recovers: writing off a small remainder can cost less than the relationship it would take to collect it. Affiliate commission structures explains why chargebacks are best treated like refunds the day they open.

Tax forms and reporting

Rules depend on where you and each partner are. Here are four cases.

A US business paying US partners. Collect a Form W-9 before the first payout. It gives you the partner's taxpayer identification number, and the IRS says a payer must withhold 24% ("backup withholding") from reportable payments to a partner who has not provided one.

After the year ends, file Form 1099-NEC for each partner you paid at least the reporting threshold, and send them a copy, by January 31, or the next business day when that falls on a weekend or holiday (for 2026 payments, February 1, 2027). The threshold was $600 and is $2,000 for payments made after December 31, 2025, and it may be adjusted for inflation from 2027. The IRS counts commissions paid for services performed by someone who is not your employee as nonemployee compensation. If you changed platforms during the year, add what the old one paid: switching affiliate software explains why.

One exception is worth asking about: payments made by card, or through a third-party payment network, are reported by the network on Form 1099-K and not by you on Form 1099-NEC. Ask your accountant whether the way you pay partners counts.

A US business paying partners outside the US. Partners who are not US persons give you a Form W-8BEN (individuals) or W-8BEN-E (entities) instead of a W-9, and you keep it rather than sending it to the IRS. A W-8BEN generally stays valid until the end of the third calendar year after the year it was signed, so a form signed in 2026 is good through December 31, 2029, unless something on it changes. A US citizen living abroad gives a W-9. Ask your accountant what each partner's country and form mean for withholding.

A UK business paying VAT-registered partners. You can write your partners' VAT invoices for them (self-billing), but only with a written self-billing agreement in place first. HMRC says the agreement needs a start date and an expiry date, which can follow the term of your contract, and advises reviewing it every 12 months. Each invoice must be marked "SELF-BILLING".

An EU business. EU VAT law allows self-billing where you and the partner have agreed to it in advance and there is a procedure for the partner to accept each invoice, and the invoice must say "Self-billing". Each country applies the rule through its own law, so check the details where you are.

Everywhere else, and for anything above that does not fit your case, ask your accountant before the first payout rather than at the end of the year.

Payout day, step by step

  1. Close the period. At the cut-off, decide what is in this payout: commission approved by that date. Anything approved later waits for the next one.
  2. Approve what is due. Approve the commission that has passed its holding period, and look at anything held for a review first (affiliate fraud prevention covers what to look for).
  3. Preview before you pay. List who is owed, how much, in which currency, and who will not be paid and why: no payout details, under the minimum, a missing tax form if you require one, or a balance that refunds have taken below zero.
  4. Tell the partners who will not be paid, before payday, with the reason and the fix. The template is below.
  5. Check for changed payout details. A request to change where a partner is paid, made shortly before payday, deserves a second look: it is how payment-redirection fraud works. The FBI's advice is to verify any request to change account details through a second channel. Confirm it with the partner at an address or number you already had, not through the message that asked for it.
  6. Send once, from one place. Pay the batch, then record each payment with its reference, so nobody is paid twice and every partner's question has an answer.
  7. Tell partners they have been paid: the amount, the reference, and the commissions it covers, with any reversal on its own line.
  8. Watch for payments that come back. A bank returns a payment to a closed account or a mistyped number. Record it as returned, put the amount back on the partner's balance, and ask them to fix their details before the next payday.

Tell partners who is not being paid, and why

The partners who are not paid on payday are the ones who will remember it. An email before payday turns a disappointment into a to-do. Use one reason per email, in plain words:

Subject: Your {month} payout

Hi {first_name},

Our {month} payout goes out on {payday}. You won't receive one this time, because {reason, such as "we don't have your payout details yet" or "your approved balance is $32.40, under our $50 minimum"}.

{What happens next, such as "Add your details in your partner portal by {cut-off} and you'll be included next month." or "Your balance carries over, so nothing is lost."}

{sender_name}

What partners should be able to see

Every question a partner can answer for themselves is one they do not send you. Give them, without asking:

  • Their balance by stage: waiting out the holding period, approved, and paid, each with its date.
  • Every payout, with its reference and the commissions it covers, refunds and chargebacks netted as their own lines.
  • Why they were not paid, in words, when they were not.
  • The next payday and the minimum, and how far they are from it.
  • A record for their own taxes: what you paid them in the year.

Write your payout terms in a few sentences

A partner should be able to read your terms and know when they will be paid, how, and what could change the amount. For the schedule above:

We pay on the 15th of each month for commission approved by the end of the previous month, once your approved balance is at least $50 (or €50, or £40). Smaller balances carry over. We pay by PayPal or bank transfer, in the currency you earned it in, and transfer fees are ours. Commission on an order is approved 35 days after the order unless it is refunded, and a refund after you have been paid is taken from your next payout. US partners: we need a Form W-9 before your first payout. Partners outside the US: a Form W-8BEN. If a payment comes back to us, we'll let you know and pay it at the next payout once your details are fixed.

Payout checklist

Before the first payout

  • Payday and cut-off, written in the terms
  • The full wait from order to payment, told to partners as a range
  • Minimum per currency, and what happens to a balance under it
  • Payment methods, and who pays transfer fees
  • Tax forms collected at signup or before the first payout
  • Refunds and chargebacks after payout netted against the next payout

Every payout

  • Period closed at the cut-off
  • Due commission approved, held items looked at
  • Preview checked: who is paid, who is not, and why
  • Partners who will not be paid told before payday
  • Changed payout details confirmed through a known channel
  • Batch sent once, each payment recorded with its reference
  • Partners told what they were paid and what it covers
  • Returned payments recorded and the amount put back

Every January (US)

  • Totals per partner for the year, including any paid through a previous platform
  • Forms 1099-NEC filed and sent by the deadline

How Refficks handles payouts

Refficks is a new partner program platform. It does not pay on a timer: a person decides when money moves, every time.

  • A reminder on the 1st, not a robot. On the 1st of each month, from 8:00 in your time zone, Refficks emails your owners and admins how much is approved and ready to pay, who is held back and why, and how many commissions still need approving. You build the payouts when you are ready, and approve each one.
  • Who is left out, before you build. The Ready to pay preview lists everyone owed money and dims the partners who will not be paid, with the reason under their name: "No payout details on file", "Under the $50.00 minimum", "Owes more than they have earned" or "Bank refused their details. Waiting for new ones". You can also choose to pay only partners with a tax form on file.
  • A changed destination is flagged. A partner who changed their payout details in the last 30 days shows as "Destination changed 3 days ago" in the preview. Only the partner can change them, from their own login and with their password, never support acting as them, and they are emailed the masked before and after.
  • Minimums per currency. Refficks's own are $50, €50 and £40, with a matching figure in other currencies, and you can set your own for your program's currency. Smaller balances roll over, and the partner's portal says so: "Nothing is lost; it rolls over."
  • Pay from a file, or press send. Download a general CSV, PayPal's Payouts upload or Wise's batch template, or connect your own PayPal account and send approved PayPal payouts from your PayPal balance. For partners who are also customers, store credit can be added in Stripe or Shopify, or sent as a BigCommerce gift certificate, once you switch it on. Each send is one press, and no timer, automation or AI can move money.
  • Never converted, never twice. A partner owed in two currencies gets two payouts, and a commission can be in only one payout.
  • Paid with a reference, and owed again if it comes back. Each payout is marked paid with your bank's or PayPal's reference. If the money comes back, you record why: the payment stays recorded as sent, and its commission is owed again and goes into the next payout. A partner whose account was closed is held until they save new details.
  • Refunds after payout come off the next one, as their own lines on the next payout's statement.
  • What partners see. Their portal shows what is waiting for the next payout, every payout with its reference and, when something is holding their money back, what it is: no payout details, a balance under the minimum, or a payment their bank returned. Each paid payout has a PDF statement listing every commission and how it was worked out. A ready-made "Payout sent" email gives the amount and the reference, and goes out once you add it to an automation for paid payouts.
  • Tax forms in the portal. Partners give a W-9, W-8BEN or W-8BEN-E there, and the number is never shown back in full on any screen, to them or to you. The 1099-NEC screen applies each year's threshold, and says so when the IRS has not published one yet. You download the data, with each partner's full number, and file the forms yourself; each download is recorded in History. UK and EU merchants can issue self-billed invoices once a partner agrees, with a credit note if a payment comes back; Refficks switches self-billing on for your account.
  • Payout details stay private. They are encrypted and never shown on any screen. They leave Refficks only in the file you download, or to the service you send a payout through, such as PayPal, and each time is recorded in History.
  • Moving money is an admin's job. Only owners and admins can build, approve, send or mark payouts paid.

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Sources

All read on October 16, 2026.