Pay structure modelReviewed by Adroit Staffing editorial reviewPractice guidance, no data claims10 min read
The short answer
Most sales commission plans are a variation on six structures: flat rate on revenue, tiered or accelerated, margin-based, quota-attainment based, multiplier or kicker, and team-pooled. Each rewards different behaviour, and the rules around the structure — payment trigger, caps, clawback, ramp and leaver treatment — usually affect real earnings more than the headline rate does.
Key facts
- Structures in common use
- Six, with most plans blending two
- Sets the ceiling on the rate
- Gross margin
- Most-overlooked rule
- When commission is actually paid
- Rates published here
- None — a defensible rate is specific to your margin
The common structures, and what each one rewards
Every commission structure is a statement about the behaviour you want. Choosing one is easier when you read it as an incentive design question rather than a payroll question.
How to read the figures on this page
Structural guidance only. No rates, percentages or market ranges are published here, because a defensible rate depends on gross margin, deal size and cycle length that are specific to your business.
What the data labels mean
- Sourced market data
- Taken from an external published source, cited with the date it was read.
- Adroit original data
- Drawn from our own briefs and placements, with the method described below.
- Explanatory guidance
- Explains how pay is structured. Makes no claim about current market levels.
- Illustrative example
- Arithmetic to show how the structure works. Not a market range.
- Source required
- Defined but not published: we do not hold data we can attribute yet.
Structures in common use
Explanatory guidanceWhat each structure rewards, and the behaviour it tends to produce when it is the only mechanism.
| Structure | How it works | Fits when | Watch for |
|---|---|---|---|
| Flat rate on revenue | One percentage on all closed revenue | Simple product, consistent margin | Discounting, since margin is not the seller's problem |
| Tiered / accelerated | Rate rises past thresholds | You want over-performance, not just attainment | Sandbagging deals into the next period |
| Margin-based | Paid on gross margin, not revenue | Pricing flexibility sits with the seller | Complexity, and margin data the seller cannot see |
| Quota-attainment based | Variable pay scales with percentage of quota | Quotas are set carefully and fairly | Quota setting becoming the real negotiation |
| Multiplier / kicker | Bonus for a strategic outcome, e.g. a new segment | You need a specific behaviour this year | Too many kickers diluting the primary number |
| Team or pooled | Shared against a collective number | Deals genuinely need several people | Strong individuals subsidising weak ones |
Rules that decide real earnings
Explanatory guidance| Rule | Why it matters | State it as |
|---|---|---|
| Payment trigger | Determines when money actually arrives | On signature, on invoice, or on cash collection |
| Cap | Limits upside and can stall a strong quarter | Capped at a stated level, or uncapped |
| Clawback | Recovers pay on cancellation or non-payment | The trigger events and the window |
| Ramp | Protects a new hire through onboarding | Duration, level, and whether repayable |
| Leaver treatment | Deals closing after notice is given | Paid, pro-rated, or forfeited |
| Change rights | Whether the plan can be rewritten mid-year | Notice period and what needs agreement |
What moves the number
Direction of travel only. We do not publish a percentage uplift for any of these unless the size is evidenced.
Gross margin
Explanatory guidanceMoves pay in either direction
A rate that is generous on a high-margin software deal can be unaffordable on a resold or services-heavy one. Margin sets the ceiling on the rate.
Cycle length
Explanatory guidanceMoves pay in either direction
Long cycles need either a stronger base or in-period milestones, or a new hire earns almost nothing in a year of good work.
Self-sourced share
Explanatory guidanceTends to push pay up
Where sellers create their own pipeline, the variable element usually needs to be larger to reflect the additional work and risk.
Worked examples
How an accelerator changes behaviour
Illustrative example- Rate to 100% of quota
- 1x
- Rate above 100%
- 1.5x
- Effect at 95% in December
- Strong pull to close
- Effect at 130% in December
- Pull to hold deals back
Illustrative multipliers, not a recommendation. The point is that thresholds create timing behaviour at both ends, which is why plans need a rule on deal timing.
Method and refresh
- Structure and definitions are reviewed twice a year, and immediately if a legal or reporting requirement changes.
- Any figure carries the publisher and the date it was read, beside the figure rather than in a footnote.
- Where we use our own placement and brief data, we say how many roles it covers and over what period.
- A figure whose source has not been re-checked within the cadence is removed rather than left standing.
- Refresh cadence
- Reviewed every six months, and whenever a cited source publishes an update.
- Next review due
Use this with
- How sales compensation is structured
The components of a package and what to check about each one.
- How to hire an Account Executive
The brief, the evidence to look for and the usual failure points.
- Sales career map: SDR to CRO
Where each seat sits, so a package can be pitched at the right level.
- How to set OTE for a new sales hire
Working from quota and margin to a package you can defend.
A plan is a behaviour specification
Whatever the plan pays for is what the team will do, including the parts you did not intend. A flat rate on revenue with no margin component reliably produces discounting. Accelerators produce timing games at both ends of a period. Kickers for a strategic segment work, right up to the point where there are four of them and nobody knows which number matters.
Design it in that order: name the behaviour you need this year, then choose the mechanism that pays for it, then write the rules that stop the obvious gaming.
Write these rules down before the first offer
- 01The payment trigger: signature, invoice, or cash collection.
- 02Whether earnings are capped, and where.
- 03Clawback triggers and the window they apply for.
- 04Ramp: how long, at what level, and whether repayable if the person leaves.
- 05What happens to a deal that closes after notice is given.
- 06Whether the plan can change mid-year, with what notice.
Simplicity beats cleverness
A seller should be able to work out what they earn from a deal without a spreadsheet. Where they cannot, the plan stops motivating and starts generating disputes — and the most common cause is a plan that has had a well-intentioned modifier added to it every year for four years.
Common questions
- Should commission be paid on revenue or margin?
- Margin-based plans protect pricing, and they are the right answer where sellers have real discounting authority. They only work if the seller can actually see the margin on a deal at the point of quoting.
- Should we cap commission?
- Usually not. A cap is a message that outperformance is a problem, and the strongest sellers read it accurately. If a single deal could produce an uncomfortable payout, handle that with a large-deal clause rather than a blanket cap.
- How often should the plan change?
- Annually at most, with the rules for in-year changes written down in advance. Frequent changes destroy the trust the plan depends on.
Sources and review
- Written by
- Adroit Staffing
- Reviewed by
- Adroit Staffing editorial review
- First published
- Last reviewed
Reviewed every six months, and re-checked whenever a cited source changes. Next review due by . If a figure here no longer matches what you are seeing, tell us and we will re-check it.
This page is practice guidance from our own Sales and GTM recruitment work. It makes no claims about current market data, so it cites no external figures.