In animal groups with dominance hierarchies, there often occurs a tug-of-war competition over resources and reproduction between dominants and subordinates, because neither is able to fully control the other. Consequently, individuals may mitigate within-group conflict, either by fighting others or by signalling their willingness to tolerate others. Nevertheless, how such a tolerance interaction evolves remains unclear. Here, we addressed this knowledge gap and tested the tug-of-war competition hypothesis, by investigating whether subordinates pay to stay in the group by helping dominants (pay-to-stay), and whether dominants pay costs by living with subordinates in the group (pay-from-staying). We used the burying beetles, Nicrophorus vespilloides, which compete with intra- and inter-specifics for valuable carcasses that are needed for reproduction. Multiple conspecifics can reproduce together through communal breeding, thereby enhancing benefits in terms of reproduction and resource defence against competitors. In communal associations, larger individuals are often dominant in carcass use and reproduction, whereas subordinates have restricted access to the carcass. Our findings show that cooperative subordinates paid costs by helping dominant breeders in carcass preparation in order to be tolerated (i.e. increased access towards the carcass) by dominant breeders, but subordinates did not increase their reproductive success by helping. Such tolerance was eliminated by a high interspecific competition with blowfly maggots. Our results also show that dominant males, but not dominant females, benefitted more from the presence of subordinates, partly due to a sex difference in the compensation strategy of dominants. Overall, our study demonstrates that a social tolerance occurring in situations with a tug-of-war competition could be a common strategy to resolve conflicts in animal societies.