Best 6 Types of Compensation Plans in Network Marketing Software
One of the fastest growing business models in the current digital economy is network marketing. Network marketing is open to anyone given it’s low cost to get started, flexible hours, and social community to learn from. Aspiring entrepreneurs, or people’s who just want to make money from selling products, can quickly join the network marketing lifestyle anywhere un the world. However, beyond the support and resources any specific network marketing company provides, a good company has a strong compensation plan, that governs how members get rewarded for their sales and the number of people they recruit. MLM Compensation plans can be difficult to understand and confusing. And, this is why there is such useful software for MLM companies to have an easier way to manage commission payouts, downlines, and reports.
We will discuss the 6 most powerful and most commonly utilized compensation plans used in network marketing software. Each of these compensation plans have their advantages and disadvantages, and are best used depending on the business model.
Australian MLM Software
The Australian Unilevel or Binary Plan is a unique twist on the traditional binary model. It combines a two-leg structure with an auto-placement system that ensures fair distribution of members throughout the tree. This model encourages teamwork and offers equal growth opportunity to all members.
Key Features
- Two direct downlines (left & right) or Unlimited Downlines.
- Auto-fill structure for new members.
- Spillover benefits for team members.
- Matching pair commissions based on weaker leg.
- Encourages team-driven growth.
Ideal For:
Companies that want a high-paced system with team rewards and automatic placement.
Binary MLM Software
The Binary Plan is among the most common MLM compensation models. It allows each member to recruit two direct downlines. Commission is earned when a left-leg and right-leg member form a pair, encouraging users to balance their team.
Key Features
- Two legs per distributor.
- Unlimited depth.
- Pairing bonuses.
- Left and right leg volume tracking.
- Capping and carry-forward options.
Ideal For:
MLM companies aiming for fast growth with simple team-building logic.
Board MLM Software
The Board Plan, also known as a revolving matrix or cycle plan, creates small teams (boards) that rotate and split as they fill up. It’s a competitive, performance-based plan that rewards users for fast movement and leadership.
Key Features
- Temporary boards (2x2, 3x1, etc.).
- Auto-shifting after board fills.
- Promotion to next-level boards.
- Re-entry into new boards.
- Bonus incentives on board completion.
Ideal For:
Gamified network environments where quick movement and rank-based rewards matter.
Matrix MLM Software
The Matrix Plan is a fixed-width, fixed-depth structure like 3×3 or 5×5. Members can recruit only a limited number of downlines directly. Excess recruits are “spilled over” to the next available level in the matrix.
Key Features
- Fixed recruitment levels (e.g., 3 wide, 3 deep).
- Controlled income distribution.
- Level-wise bonuses.
- Spillover to help team members.
- Rank advancements based on level completion.
Ideal For:
MLM companies looking to limit earning potential while maintaining fair, balanced payouts.
Single Leg (Monoline) MLM Software
The Single Leg Plan, or Monoline Plan, is the simplest structure in MLM. Every new member is placed under the last one who joined, forming a single vertical chain. All users benefit from system-wide growth.
Key Features
- One single line of members.
- Everyone receives spillover from above.
- Income depends on position in the line.
- Easy to explain and manage.
- Passive income opportunities.
Ideal For:
Beginner-friendly MLM programs or passive earning models where recruitment isn’t required for initial income.
Unilevel MLM Software
The Unilevel Plan allows unlimited front-line referrals and distributes commission across multiple levels (e.g., 5 to 10). It is widely used in product-based MLM companies due to its simplicity and transparency.
Key Features
- Unlimited width in recruitment.
- Payout across fixed depth (levels).
- Dynamic compression for empty positions.
- Rank-based earnings.
- Easy to track and audit.
Ideal For:
Retail or product-focused MLMs that prioritize direct sales over complex team structures.
Summary Table
| Plan Type | Direct Members | Spillover | Ideal For | Complexity |
|---|---|---|---|---|
| Australian with Binary or Unilevel Plan | 2 | ✅ Yes | Team-driven growth | ⚙️ Medium |
| Binary Plan | 2 | ✅ Yes | Fast expansion | ⚙️ Medium |
| Board Plan | Varies | ⚠️ Limited | Performance-based rewards | 🔧 High |
| Single Leg (Monoline) MLM Plan | 1 line | ✅ Yes | Passive income, beginners | 🟢 Low |
| Matrix Plan | Fixed (e.g. 3) | ✅ Yes | Controlled growth, fairness | ⚙️ Medium |
| Unilevel Plan | Unlimited | ❌ No | Product selling & retail MLM | 🟢 Low |
Final Thoughts
The right compensation plan is the foundation of a strong and sustainable MLM business. Whether you’re targeting speed, simplicity, fairness, or gamification, the six compensation plans above provide a wide range of choices tailored to different business models.
💼 With modern MLM Software (like the ones offered by LetsCMS or mlmtrees.com), you can implement any of these plans with complete automation — including real-time genealogy tracking, commission calculation, wallet management, tax reports, and multi-currency support.