Sales commission structures, with worked examples

Ten ways to pay salespeople, from a flat rate to recoverable draws, each with the arithmetic written out. Every example can be opened in the commission calculator.

Updated 1 November 2026 · by the Vexquota team

1. Flat rate on revenue

One percentage of every deal. It is the easiest plan to explain and to check, which is why most small teams start here.

Use it when deals have similar margins and you don't need to push reps past a target. Calculate a flat rate.

2. Commission on gross margin

The rate applies to the profit on the deal instead of its revenue. Distributors and resellers use it so that discounting to win volume also cuts the rep's commission.

3. Tiered commission

The rate rises as the rep sells more in the period. Tiers can start at sales amounts ($0–$50,000, then above $50,000) or at quota attainment (up to 100%, then above). The detail that matters most is whether tiers are marginal or retroactive.

Marginal tiers pay each slice at its own rate, like tax brackets. Retroactive tiers re-rate every deal in the period once a threshold is crossed, so the deal that crosses it is worth much more than its size. Write down which one your plan uses: it is the most common source of commission disputes. Compare both in the calculator.

4. Quota and accelerators

A quota is the sales target for the period. Attainment is credited sales divided by quota. An accelerator multiplies commission once attainment reaches a threshold, and a decelerator (a multiplier below 1) reduces it below a floor.

In Vexquota the multiplier applies to the period's commission once the final attainment falls in its band. If you only want to pay more on sales above quota, use marginal tiers instead. Try the accelerator.

5. Splits

One deal credited to several reps by percentage. Each rep is paid on their share at their own rate, and the share counts toward their own quota.

6. Manager overrides

A manager earns a percentage of the commission their direct reports earn, which aligns the manager with the team's payouts rather than their own deals.

7. Bonuses and SPIFFs

A bonus is a fixed amount for an event: reaching quota, or each deal of a certain kind. A SPIFF is a bonus with start and end dates, used to push one product or campaign.

8. Draws

A draw guarantees a minimum payout, usually for new reps or long sales cycles. A recoverable draw is an advance: the shortfall is owed back from later earnings above the draw. A non-recoverable draw is a guarantee: the top-up is never owed.

Calculate a draw.

9. Caps

A maximum commission per deal or per period. Caps keep a single freak deal from blowing the budget, but they also tell top performers to stop selling, so use them sparingly and say so in the plan.

10. Clawbacks and "pay when paid"

A clawback reverses commission when a customer refunds or cancels within a window, such as 30 or 90 days. "Pay when paid" credits a deal on the date the customer pays instead of the close date, so unpaid invoices earn nothing yet.

In Vexquota a clawback lands in the next open period as its own line. Closed periods are never rewritten, so the statement a rep was already paid on stays exactly as it was.

Choosing a structure

• Fewer than five reps and similar deals: a flat rate, maybe with a quota bonus.
• Thin or variable margins: commission on margin, per product category if needed.
• Quota-carrying reps: marginal tiers or an accelerator above 100%.
• Team selling: splits, plus an override for the manager.
• Refunds or early churn are common: a clawback window, or pay when paid.

Whatever you choose, the rep should be able to recompute their own payout from the statement. That is the idea behind Vexquota: every line says what it pays and why. See the plans built for real estate, insurance, distributors, agencies and SaaS.