Sub-Affiliate Programs: How Two-Tier Affiliate Commissions Work

A sub-affiliate program pays an affiliate a second-tier commission, usually called an override, on the results of other affiliates they recruit into the program. The recruit earns their normal commission; the recruiter earns an extra amount, typically funded by the brand. Two-tier programs are the common form. Deeper multi-tier structures exist, but each extra level adds fraud and regulatory risk.

This guide explains how two-tier commissions are calculated, the structures programs use (with labelled examples), the risks for brands and affiliates, and what to do if your platform has no sub-affiliate tier, as is the case with MassPartner for brands.

How a two-tier affiliate program works#

1. Recruitment link. The brand gives each affiliate a referral link for recruiting other publishers, separate from the tracking links they use to send customers.
2. Parent assignment. A publisher who signs up through that link is recorded as the recruiter's sub-affiliate. The recruiter becomes the parent (or master) affiliate.
3. Normal commissions. The sub-affiliate promotes the brand and earns commission on their own customers, exactly like any other affiliate.
4. Override. When the sub-affiliate's commission is approved, the platform credits the parent with an override, often a percentage of that commission.
5. Payout. Both are paid on the program's normal schedule. Reversals on the sub-affiliate's side should reverse the parent's override too.

Brand
 └── Affiliate A (parent)          earns own commission + override on B and C
      ├── Affiliate B (tier 2)     earns own commission
      └── Affiliate C (tier 2)     earns own commission

In a two-tier program, the chain stops there: if B recruits D, A earns nothing on D. Multi-tier programs extend the override to further levels.

Two-tier, multi-tier and MLM: where the line is#

Overrides look similar to multi-level marketing, and the comparison matters. In its business guidance on multi-level marketing (April 2024), the FTC explains that it looks at how a compensation structure works in practice, and that a pyramid scheme pays participants for recruiting rather than for sales to real end customers.

The safest design ties every override to approved customer conversions and pays nothing for sign-ups alone. This is a general description, not legal advice; check your structure with counsel in each market you serve.

Typical sub-affiliate commission structures#

All figures below are illustrative examples, not market rates.

Percentage of the sub-affiliate's commission#

The most common model. Example: the brand pays a 5% override on recruits' commission. Recruits earn $8,000 in a month, so the parent receives $400 on top, paid by the brand.

Percentage of revenue from the sub-affiliate's customers#

Common in RevShare programs, including iGaming. Example: the parent earns 3% of the net revenue generated by recruits' players, while recruits earn their own RevShare. On $50,000 of monthly net revenue from recruits' players, the override is $1,500.

Time-limited override#

Example: 10% of recruits' commission for the first 12 months after each recruit joins. Time limits stop overrides on long-dormant recruits from becoming a permanent cost.

Flat bonus for an active recruit#

Example: $100 once a recruit's first ten conversions are approved. Tie it to approved sales, never to the sign-up itself, so the bonus rewards a productive partner rather than a headcount.

Some programs fund the override by deducting it from the recruit's rate instead. That keeps the brand's cost flat but makes the program less attractive to the recruit, so say clearly in your terms which model applies.

Specialist platforms support deep structures. As of October 2026, MyAffiliates' commission plans page lists unlimited sub-affiliate tiers with fixed, percentage-based or tiered payouts. Software support doesn't make depth a good idea; each level adds cost and supervision work.

Why brands run sub-affiliate programs#

• Recruiting through trusted voices. Strong affiliates know other publishers, and an introduction from a peer converts better than a cold email.
• Aligned incentives. A parent with an override has a reason to coach recruits on what converts and what the rules are.
• Agencies and sub-networks. Media agencies that manage many small publishers fit naturally into a parent-and-recruits structure.

Our guide to recruiting affiliates covers referrals from current partners alongside 14 other channels.

Risks for brands#

Self-referral and override farming#

The classic abuse: an affiliate registers a second account as their own "recruit" and collects both the recruit's commission and the override. Combined with self-referral on the customer side, the same person can be paid three times for one sale. Check payout details, company registration, IPs and devices across parent and recruit accounts.

Traffic you never vetted#

Recruits arrive with their parent's endorsement, not yours. If a recruit uses incentivized traffic, spam or misleading claims, the conversions still land in your program and the reputational damage lands on your brand.

Regulatory responsibility#

Regulators look at the brand, not the tier. The UK Gambling Commission's licence condition 1.1.2 makes licensees responsible for third parties they contract with, requires contracts that bind those parties as if they held the licensee's own license conditions, and requires the right to terminate promptly when a third party breaches them. In the US, the FTC's Endorsement Guides FAQ expects advertisers to have "reasonable programs in place to train and monitor members of their network." Every additional tier makes that training and monitoring harder to prove.

Cost creep#

Overrides raise your effective cost per customer. Example: a $100 CPA with a 10% override costs $110 per customer from recruited partners. Include overrides when you calculate the maximum commission your margins allow.

How to run a sub-affiliate program safely#

1. Stay at two tiers. Deeper structures rarely recruit enough extra quality to justify the risk.
2. Approve every recruit yourself. The parent's referral is an introduction, not an approval.
3. Use one contract for everyone. Recruits sign the same affiliate agreement, with the same prohibited actions and disclosure duties as direct affiliates.
4. Pay overrides only on approved commissions, after any hold period, and reverse them when the underlying commission is reversed.
5. Cap and time-limit overrides, for example a maximum percentage and a 12-month window.
6. Block self-recruitment. Reject recruits who share payout details, company data or devices with the parent.
7. Keep the right to remove individual recruits without ending the parent's account, and the parent's override for that recruit with them.
8. Report by recruit. Parents and the brand should both see each recruit's clicks, conversions and reversals.

If your platform has no sub-affiliate tier#

MassPartner does not offer multi-tier or sub-affiliate commissions: each affiliate earns commission only on conversions from their own tracking links. Brands that want to reward introductions have three practical options:

• Agree a referral fee outside the platform. Pay a recruiter a negotiated fee for productive introductions under a separate written agreement, and keep the conditions tied to approved sales.
• Onboard agencies as one affiliate. Let a sub-network join as a single partner and require it to pass its publisher IDs in sub IDs, so you can see and block individual sources.
• Control recruiting by contract. MassPartner's contract builder includes a prohibited-actions clause stating that affiliates may not recruit sub-affiliates without the brand's prior written approval.

For affiliates: questions before you join a two-tier program#

• Who funds the override: the brand, or a deduction from your recruits' rates?
• How long does the override last, and does it end if your recruit goes inactive?
• If a recruit's commission is reversed, is your override clawed back?
• Can you see each recruit's stats, or only a total?
• What happens to your account if a recruit breaks the rules?

A recruit's misconduct can put your own relationship with the brand at risk, so recruit people whose traffic you would be comfortable defending. Our affiliate fraud detection guide shows the patterns brands look for.

Run a single-tier program with full visibility#

MassPartner tracks each affiliate's own clicks and conversions with up to five sub IDs, scores every click for fraud, and lets you require approval before partners recruit others. Brands can start a free trial and see whether a single-tier program with clear sub-ID reporting covers what they need.