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Thread: How do I pay affiliate commissions ?

  1. #1
    Gold Member daveob's Avatar
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    How do I pay affiliate commissions ?

    Anyone with experience in this ?

    Am wanting to start paying comms to affiliates who bring new clients to my online service.

    How do I do this ?

    If the affiliate has bought in R1000 business and is due R150 comms, does he have to send me an invoice so that I can claim it as a 'cost of sales' expense ?

    What about the VAT ? Is it applicable for affiliate comms ?
    Do I take 14% off the comms and give it to SARS ?

    All advice appreciated.
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  2. #2
    Bronze Member Karenwhe's Avatar
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    Dave,

    That would depend on who the affiliate is (entity, person) and then on your agreement with them for this commission.

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    Gold Member daveob's Avatar
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    Hi Karen

    My main area to source affiliates from that I am looking at is individuals and web site owners. It's easy to set the comm rates, etc, but how do you put it through the books to stay legal and above board ?
    Watching the ships passing by.

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    Platinum Member SilverNodashi's Avatar
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    one of the online companies we deal with, request that we issue them an invoice, and then they pay us for it.

    As far as VAT go, I'm not 100% sure, but I think it will fall under the same category as paying a sales rep a commission - do you pay VAT on that?
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    Hi Dave

    I recommend that your affiliates send you an invoice provided they are company owners (affiliates with registered companies), but generaly affiliate marketers are individuals, so they wont send an invoice.

    Commision payments will be part of your operational expenses. You only pay VAT if your company is registered for VAT. Generally nope you will not pay SARS vat for commission payable.

    Jovial

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    Doing it manually is a huge pain. What do you do if you have 10 000 affiliates?? Its impossible. You can do it manually if you dont want to expand the programme to much but if you want to grow you need a system to do it tor you.

    Check out www.netready.co.za. It will automatically calculate comm, vat and everything else you need it to calculate and pay out for you. It is web based so you can do everything remotely. It does alot of other things too but thats all on the site

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