Are you dead set on paying out directly? Internet communities always get worse when there's money involved. It will be a constant fight between moderation and clickbait. People will make it their job to game the system. You could, instead, have votes go toward paying a user's subscription fee instead of cash.

> I've also considered adding a threshold for payouts (i.e. $50 withdrawal minimum) to help with the reporting aspects.

Do this anyway. You don't want to be paying out every cent immediately to people reposting things that otherwise warrant moderation.

Another option is to have a "play it forward" option, where your earnings are passed on to things that you voted for during the month.

This is the way. Minimum threshold. That's how Adsense works.