Glossary
Salary + Commission compensation
A guaranteed base salary plus performance-based commissions.
This compensation format gives reps a guaranteed base salary plus commissions based on their performance or sales activity.
Both the sales rep and the employer have fair shares of responsibility and risk with this format. The salary lets reps budget and pay their bills during bad months while the opportunity for commission incentivizes excellent performance.
A typical salary + commission plan pays good reps a total compensation of at least double their base salary. In other words, if a sales rep performs well while earning a base salary of $50k/yr, their commission should be equal or greater to $50k/yr, placing their total compensation (OTE) at $100k/yr or more.
This is the most common compensation format and should be used by most companies.
Both the sales rep and the employer have fair shares of responsibility and risk with this format. The salary lets reps budget and pay their bills during bad months while the opportunity for commission incentivizes excellent performance.
A typical salary + commission plan pays good reps a total compensation of at least double their base salary. In other words, if a sales rep performs well while earning a base salary of $50k/yr, their commission should be equal or greater to $50k/yr, placing their total compensation (OTE) at $100k/yr or more.
This is the most common compensation format and should be used by most companies.