Commission calculation is the heartbeat of any MLM business. Get it right and members trust every payout; get it wrong and you’ll spend your days answering “why was I paid this?” This guide explains how the most common MLM commissions are calculated \u2014 with simple worked examples \u2014 and why, past a certain size, software should do the math for you.<\/p>\n
Most MLM plans don’t calculate commissions directly in dollars. Instead, each product is assigned a point value \u2014 PV (Point Value)<\/strong> or BV (Business Volume)<\/strong>. Commissions are then paid as a percentage of accumulated points. This keeps payouts consistent across currencies and countries, which matters the moment you sell internationally.<\/p>\n For simplicity, the examples below treat 1 point as roughly 1 currency unit, but remember that real plans run the math on points.<\/p>\n In a level plan, you earn a set percentage on the volume of each level beneath you, down to a maximum depth. Say your plan pays: Level 1 = 10%, Level 2 = 5%, Level 3 = 3%.<\/p>\n Example:<\/strong><\/p>\n Level 1 members generate 2,000 PV \u2192 10% = 200<\/strong><\/p>\n Level 2 members generate 5,000 PV \u2192 5% = 250<\/strong><\/p>\n Level 3 members generate 8,000 PV \u2192 3% = 240<\/strong><\/p>\n Total commission = 690<\/strong><\/p>\n<\/p><\/div>\n Each level’s volume is multiplied by that level’s rate, and the results are summed. Simple to follow \u2014 which is exactly why unilevel is the easiest plan to explain to members.<\/p>\n Binary plans pay on the weaker leg<\/strong>. You total the volume in each leg, take the smaller one, and apply your binary payout percentage (say 10%).<\/p>\n Example:<\/strong><\/p>\n Left leg volume = 12,000 PV<\/p>\n Right leg volume = 8,000 PV (weaker leg)<\/p>\n Binary payout = 10% of 8,000 = 800<\/strong><\/p>\n The 4,000 PV excess on the left leg is typically carried forward to the next cycle (or flushed, per plan rules).<\/p>\n<\/p><\/div>\nLevel (Unilevel) Commissions<\/h2>\n
Binary Commissions (Pay Leg)<\/h2>\n