You set commission terms by defining exactly what counts as a qualifying sale, fixing an attribution window that survives a reasonable delay between click and purchase, stating clearly when commission is earned versus when it is actually paid, and building in a clawback right for refunds and cancellations. Get those four decisions right before you write a single number, because the rate itself is the easy part. This article does not repeat the general checklist of clauses an affiliate agreement needs, which our affiliate agreement template guide already covers. It focuses on the commercial decision behind the commission clause itself.
> Quick answer: Commission terms need a precise qualifying-sale definition, an attribution window long enough to catch a real buying decision, a clear split between when commission is earned and when it is paid, and a clawback right for refunds within that window. Add the advertising standards that come with letting someone market on your behalf, since a non-compliant affiliate advert becomes your reputational problem, not just theirs. Write every one of these into the agreement rather than a side conversation.
What counts as a qualifying sale
Start with the single decision that causes the most disputes later: what actually triggers commission. A completed order is not automatically a qualifying sale, and neither is a signup on its own. Decide whether commission triggers on a paid order, on a subscription that survives its first billing cycle, or only on a genuinely new customer rather than an existing one who happened to click an affiliate link on the way to a repeat purchase. Write the definition as a plain rule an affiliate can check for themselves, not a phrase that needs your judgement every time a borderline case comes up.
The definition also needs to say what does not qualify. Orders placed through a discount code that bypasses the affiliate link, orders from an account the affiliate holds themselves, or orders cancelled within a stated period should all be named as exclusions in the clause itself. An agreement silent on exclusions leaves you arguing the point after the affiliate has already told their audience the commission is due.
Setting the attribution window
The attribution window is how long after a click a resulting sale still counts. Thirty to sixty days is common for a considered purchase, shorter for an impulse buy, longer for a subscription with a long sales cycle. Whatever you choose, state it as a fixed number of days from the click, and say plainly what happens if the same customer clicks two different affiliate links inside that window. Most programmes credit the last valid click, and the agreement should say so rather than leaving it implied.
A window that is too short costs you good affiliates who did real work early in a customer's decision. A window that is too generous invites the attribution gaming covered in our companion piece on what happens when an affiliate claims a sale they did not make. Pick a number you can defend and track, not the longest window a template happens to suggest.
Commission table: the decisions to fix before you set a rate
| Decision | What to fix in the clause | Why it decides the argument later |
|---|---|---|
| Qualifying sale | The exact triggering event, and named exclusions | The most common source of disputes if left vague |
| Attribution window | A fixed number of days from click to sale, and the tie-break rule | Decides who gets paid when two affiliates touch the same customer |
| Earned vs paid | The point commission accrues, separate from the point it is released | Stops disputes about timing when a payout run is late |
| Clawback | The right to reverse commission on a refund or chargeback | Protects you when a sale later unwinds |
| Reporting | What statement each affiliate sees and how often | Keeps disputes about a specific order resolvable in minutes, not weeks |
Earned versus paid, and why the gap matters
Commission is earned when the qualifying sale happens, but it should not be paid out immediately. Build in a holding period, commonly tied to your own refund window, so that a sale can unwind before you release money you would otherwise have to claw back. State this as two separate dates in the clause: the date commission is recorded as earned, and the date it becomes payable once the holding period has passed. An affiliate who understands this distinction from day one is far less likely to dispute a delayed payout as a missed payment.
Clawback is the mechanism that makes the holding period worth having. If a customer refunds, charges back, or cancels within a stated period, the commission on that sale should be reversed, whether by deduction from the next payout or, where the affiliate has already been paid, by a repayment obligation. Write the clawback right into the agreement explicitly. Relying on an implied right to recover money you should not have paid is a weaker position than a clause that says so plainly.
Advertising standards that come with the arrangement
Letting someone market on your behalf is not a neutral act. An affiliate's advert reflects on you whether or not you approved the specific wording, and advertising standards rules apply to that promotion regardless of who wrote it. The agreement should require honest, non-misleading claims, clear disclosure that the promoter is an affiliate, and a ban on tactics you will not tolerate: bidding on your own trademarks, spam, or promotion on sites that would embarrass the brand. None of this is optional dressing. It is the condition attached to the commission you are agreeing to pay.
Tie the advertising standards clause to a limited, revocable brand licence, so an affiliate's right to use your name and logo depends on staying within the rules you set. An affiliate who breaches the advertising terms should lose the licence and, depending on how the agreement is drafted, any commission earned through the breaching activity.
Putting the terms in writing and keeping the record
None of this holds up if the commission terms live in a message thread rather than the signed agreement. AI Legal Drafting assembles the agreement from vetted clauses rather than inventing wording, which matters for a commission clause you intend to rely on if a dispute arises; see our assembled clauses versus invented ones guide, and our companion walkthrough on drafting an affiliate agreement with AI for the full flow. Draft the agreement with the qualifying-sale definition, the attribution window, the earned-versus-paid split and the clawback right stated in full, then send it for e-signature so every affiliate agrees to the identical terms. Electronic signatures are admissible for most commercial documents in England and Wales, with exceptions including deeds, wills, land transfers and lasting powers of attorney, so a standard affiliate agreement signs cleanly this way.
Keep the signed agreements in the same room as the rest of your commercial contracts, with page-by-page analytics showing whether each affiliate actually read the commission clause before signing. If your programme runs on renewal terms, our guide on uploading existing contracts and tracking their key dates covers setting a reminder before a term expires, rather than discovering the renewal date has passed.
This guide is written for England and Wales, where advertising standards enforcement and contract law shape the points above. If you are running an affiliate programme from another jurisdiction, the statutory detail around advertising and consumer protection will differ, but the underlying checklist, qualifying sale, attribution window, earned versus paid, and clawback, is the same structure to hold your own agreement against.
Frequently asked questions
What is a qualifying sale in an affiliate agreement?
A qualifying sale is the specific event the agreement says triggers commission, commonly a completed and paid order from a genuinely new customer, sometimes only once it survives a refund window. Defining it precisely, with named exclusions, prevents the most common category of affiliate dispute.
How long should an attribution window be?
There is no fixed legal answer. Thirty to sixty days is common for a considered purchase, shorter for an impulse item, longer for a long subscription sales cycle. Pick a number you can track and defend, state it as a fixed number of days, and set a tie-break rule for competing clicks.
Can you claw back commission after paying it?
Yes, if the agreement gives you that right. State a clawback clause explicitly, tied to refunds, chargebacks or cancellations within a defined period, rather than relying on an implied right to recover money already paid out.
Do affiliates count as employees under a commission agreement?
No, provided the agreement is drafted to keep them as independent contractors, with control over how they promote rather than fixed hours or direction. That status affects liability and tax treatment, and it should be stated plainly in the agreement itself.
Does the advertising standards clause actually matter if I never enforce it?
Yes. An unenforced clause is still evidence that you set the expectation, which matters if an affiliate's advert causes a complaint or a regulatory enquiry. Enforcing it consistently, including removing the brand licence for a breach, is what keeps the clause meaningful rather than decorative.
Set the commission terms down clearly
Assemble an affiliate agreement with the qualifying sale, attribution window, commission timing and clawback right stated plainly, drafted from vetted England and Wales clauses and signed in the same place. The free tier gives three rooms and twenty-five active links, forever, with no card required; the AI drafter and e-signature start on Pro at £19 a month. Start for free and put the commission terms on paper before the first dispute forces the conversation.
This article is general information, not legal advice. Commission structures interact with tax and advertising law, and a high-volume programme is worth a review by a qualified adviser before it scales.
Sources
- UK advertising rules and enforcement, honest and non-misleading promotion, disclosure of affiliate status: Advertising Standards Authority, https://www.asa.org.uk ; Committee of Advertising Practice (CAP) Code, https://www.cap.org.uk
- Electronic signatures, validity and exceptions including deeds, wills, land transfers and lasting powers of attorney: Law Commission, Electronic execution of documents (2019), https://lawcom.gov.uk/project/electronic-execution-of-documents/ ; HM Land Registry Practice Guide 82, https://www.gov.uk/government/publications/electronic-signatures-accepted-by-hm-land-registry-pg82