Sales Commission Calculator

In this type of commission structure, a salesperson receives a set amount of commission for each unit sold. For example, if you are paid $500 for each car you sell, that $500 is considered a placement fee. So, if you sell 10 cars in a month, you’ll receive $5,000.

The tiered commission plan is structured so that the more you sell, the more you earn per sale. It also provides sales employees with additional incentive to sell new products, upgrades to existing products, and to stay in contact with potential repeat customers.

For example, for sales of up to $15,000, the sales staff receive a commission of 8%. For sales between $15,001 and $25,000, sales staff receive a commission of 10%. For sales between $25,001, and $50,000, they receive 12%, and so forth. So, if total sales are $19,000, the salesperson will receive $1,600 ($15,000*8% + ($19,000-$15,001)*10%).

This model is based on Joel York’s article and states that the only difference between SaaS sales compensation and sales compensation for software (or other products) is that you should pay based on the lifetime value of the deal instead of the unit price of the product. Lifetime value is always proportionate to recurring revenue. So, from the very beginning, it’s easier to use MRR or ARR as the main metric in calculation commission.