Commission Waterfall

A commission waterfall defines the ordered sequence of deductions applied to gross revenue before an operator arrives at the net figure used to calculate an affiliate's payout. Each layer — platform fees, licensing costs, bonus liabilities, payment processing charges — reduces the base on which RevShare or hybrid commissions are applied. Understanding every layer is as important as the headline percentage itself when evaluating the true value of a deal.

In iGaming, the canonical waterfall runs from GGR through platform fees, regulatory levies, bonus costs, and payment processing charges to arrive at NGR, which is then multiplied by the agreed RevShare rate. Operators in regulated markets such as the UK or Ontario also deduct responsible-gambling levies and white-label royalties before reaching NGR, making their effective RevShare rates substantially lower than offshore alternatives even at identical headline percentages.

In Forex and CFD brokerage, the waterfall typically starts with spread revenue or per-lot fees and flows through IB tier splits, sub-IB overrides, and platform licensing costs before reaching the figure shared with the partner. Multi-tier IB structures add further complexity: a master IB may take a first cut, a sub-IB a second, and the end affiliate receives only the residual. Hybrid arrangements that blend CPA with a trailing RevShare layer further complicate waterfall modelling.

For prop trading operators, the waterfall is often simpler but still meaningful: challenge fees flow through platform licensing, data-feed costs, and any revenue-share arrangement with a backing firm before profit-split percentages are determined. Operators should expose a clear waterfall summary in their affiliate portal so partners can model expected earnings at different traffic volumes. Purpose-built commission management tooling makes it straightforward to configure each deduction layer and generate partner-facing waterfall breakdowns automatically.