What is a Binary Compensation Plan?

A binary plan organizes each distributor's downline into two legs (typically left and right). Commissions are calculated based on the volume of the weaker leg, which encourages distributors to keep both sides balanced rather than focusing on a single recruitment channel.

The math works like this. If your left leg generates $10,000 in commissionable volume in a cycle, and your right leg generates $7,000, your binary commission for the cycle is calculated against $7,000 (the weaker leg). The remaining $3,000 from the left leg is either flushed (zeroed out at cycle end) or carried forward to the next cycle, depending on the plan rules.

How the platform handles flush versus carry-forward is the differentiator. Carry-forward depth (how many cycles can a distributor accumulate unpaid volume), flush cadence (weekly, monthly, by paycycle), and infinity bonus support are what separate solid binary implementations from shallow ones.

Binary plans are the most common MLM structure globally because they're simple to explain to recruits and pair well with fast-start bonuses. They're also one of the most software-tested plan types, which means almost every real MLM platform supports them well. The differences show up in the edge cases.