Implementation guide · IB Commission Operations
Multi-Level IB Commissions: Avoiding Double Counting
Compare additive and differential IB commission models with a three-level example. Check effective hierarchies, negative differences and totals.
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Quick answer
A multi-level commission calculation applies a declared payment model to the partner hierarchy that was effective for an earning event. Independent rates can add together, while cumulative rate ceilings may be distributed through differences. Mixing those interpretations can pay the same entitlement twice.
Separate the hierarchy from its payment formula
A parent-child relationship identifies who introduced whom; it does not say how much each level receives. Record stable partner identifiers, the effective relationship and the client attribution separately from rate data. B2BROKER describes nested IB networks, but its overview does not make every hierarchy use one universal formula. Document whether an upstream partner receives an additional amount, a share of a fixed pool or the difference between two cumulative entitlements.
Sources for this section
Label additive rates and cumulative ceilings clearly
Under an additive model, each listed rate is a separate payment and the broker owes their sum. Under a differential model, an upper rate can represent the total permitted across that branch, with lower-level entitlement deducted to find the upper partner’s residual. The words level one and level two do not establish which direction the hierarchy runs. Use named roles and draw the client-to-partner path before presenting the arithmetic to finance or support.
Make hierarchy changes effective at a defined time
Moving a sub-partner today should not silently move a previous month’s accruals. Capture the earning event’s hierarchy version and define whether a correction reuses that version. If a parent is removed, decide whether the amount is retained, reallocated or withheld under the contract. Protect changes to rates and relationships with appropriate permissions and a review record. OWASP authorization guidance supports explicit resource-level access checks; it does not approve the commercial arrangement itself.
Sources for this section
- OWASP Authorization Cheat Sheetcheatsheetseries.owasp.org
Test impossible and incomplete configurations
A child’s cumulative rate above its parent’s ceiling can create a negative differential. Do not silently clamp that negative amount unless the agreed model requires it, because clamping changes the total. Reject or route inconsistent configurations for review. Also test a missing ancestor, an account attributed twice and a relationship cycle. Count and reconcile all resulting payable records against the intended branch total. The technical ability to configure several levels does not establish that they are permitted in every jurisdiction.
Three levels under two different models
A fictional event has 10 eligible lots. Call the immediate referrer Direct, its parent Regional, and the upper parent Master. In the additive model their independent rates are USD 2, USD 1 and USD 0.50 per lot: payments total USD 35. In the differential model the cumulative ceilings are USD 2, USD 3 and USD 3.50. The residual rates are 2, 3−2 and 3.50−3, again totaling USD 3.50 per lot. Adding the three cumulative ceilings would incorrectly produce USD 85.
| Role | Additive independent rate | Differential residual rate |
|---|---|---|
| Direct | USD 2.00 | USD 2.00 |
| Regional | USD 1.00 | USD 3.00 − 2.00 = 1.00 |
| Master | USD 0.50 | USD 3.50 − 3.00 = 0.50 |
| Total for 10 lots | USD 35.00 | USD 35.00 |
Implementation checklist
- Name the hierarchy direction and earning-event version.
- Mark each rate as independent, cumulative or a pool share.
- Reconcile the sum and reject unexplained negative differences.
- Review relationship changes and applicable program permissions.
Sources
These documents support the reference. Check the original publication for current requirements and the limits of its scope.
- B2BROKER: introducing broker program and compensation modelsb2broker.com
- OWASP Authorization Cheat Sheetcheatsheetseries.owasp.org
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