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Binary Compensation Plans

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Binary compensation plans are characterized by having two legs, and only two legs. This makes them very simple. Most binary comp plans will pay you commissions on your weak leg only – the smaller leg that has less volume. This keeps most people focused on building their weak leg, which is also known as the pay leg in a binary compensation plan. Sometimes a binary compensation plan will say it pays on both legs up to the balance point. Technically it does – but – whether it’s $10 per person on the weak leg, or $5 per person in both legs to the balance point, the final commission number is the same, and the plan functions the same way – you are limited by the size of the smaller leg. In either case, here is what the structure looks like most of the time.

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