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Sales & Pipeline

Sales Commission Calculator

Calculate sales commissions for flat rate, tiered accelerators, or draw structures. See your OTE and total compensation.

Understanding Sales Commission Structures

Sales commission structures directly impact motivation, retention, and revenue. The right plan aligns rep behavior with company goals while providing earning potential that attracts top talent.

Common Commission Structures

Flat Rate Commission

Same percentage on all deals. Simple to understand and administer. Best for transactional sales.

Tiered / Accelerators

Higher rates as you exceed quota. Motivates overperformance. Common in enterprise sales.

Draw Against Commission

Monthly advances deducted from earnings. Provides stability with long sales cycles.

Multipliers / SPIFs

Bonus multipliers for specific products, new logos, or time-limited promotions.

OTE (On-Target Earnings)

OTE represents the total compensation a rep earns at 100% quota attainment. It's typically expressed as Base + Variable (commission).

OTE = Base Salary + (Quota x Commission Rate)

Industry standard OTE splits vary by role:

  • SDR/BDR: 70/30 or 60/40 (base/variable)
  • Account Executive: 50/50 is standard
  • Enterprise AE: 60/40 or 50/50
  • Account Manager: 70/30 or 80/20

Commission Rate Benchmarks

  • SaaS: 8-15% of ACV (Annual Contract Value)
  • Enterprise Software: 5-10% of TCV (Total Contract Value)
  • Services: 10-20% of deal value
  • Real Estate: 2.5-3% of sale price

Best Practices for Commission Plans

  • Keep it simple: If reps can't calculate their commission, the plan is too complex.
  • Pay frequently: Monthly or bi-weekly payouts maintain motivation.
  • Align with company goals: Commission on ARR if retention matters. Commission on new logos if growth matters.
  • Include accelerators: Top performers should earn significantly more than average.
  • Set clawback rules: Define what happens if a customer churns quickly.

Commission Plan Mistakes

  • Capped commissions: Limits earnings and demotivates top performers.
  • Too many metrics: Reps don't know where to focus.
  • Changing plans mid-year: Destroys trust and causes attrition.
  • No accelerators: No incentive to exceed quota.
  • Delayed payouts: Waiting months for commission kills morale.

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