Commission

Commission is an additional compensation based on the employee’s performance.

A sales commission is a standard way of compensating salespeople in most businesses, usually paid in addition to a base salary.

It is typically based on the performance of the salesperson, e.g., meeting or exceeding specific sales objectives, and dynamically calculated for each member of the sales team.

Related terms:

  • On-target earnings (OTE) is a metric used to forecast the total potential compensation of a particular salesperson once all performance targets are achieved. Also known as on-track earnings, it is mostly used when talking about commission-based sales compensation.
  • Kicker refers to a higher commission rate that is used to reward high-performers and typically triggered once a sales rep achieves their quota.

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