Commission Calculator
Calculate your commission payout for flat rate, tiered, and accelerator structures.
Understanding Sales Commission Structures
Flat rate commissions are the simplest structure: you earn a fixed percentage of every dollar you close, regardless of how much you sell. They're easy to understand, easy to calculate, and create consistent incentives throughout the month. The downside is they don't create extra motivation for overachievement.
Tiered commissions pay different rates at different performance levels. This is designed to create acceleration — the more you sell, the higher rate you earn on additional revenue. Tiered plans work well when you want to reward top performers without overpaying on base-level performance. The key design decision is where the tiers break and by how much the rate changes.
Accelerator plans pay a base rate up to quota and a higher "accelerator" rate for every dollar above quota. This is one of the most powerful motivational tools in sales comp design because it creates a disproportionate upside for overachievers. The best accelerators increase earnings materially — if the accelerator rate is only slightly higher than base, it loses its motivational impact.
On-target earnings (OTE) is the total comp a rep earns at 100% of quota: base salary plus on-target commission. Most plans are designed so that a rep hitting quota earns their OTE, and exceptional performance can earn 150–200% of OTE through accelerators and overachievement bonuses.
Quota setting matters as much as the rate. An 8% commission on an undermarket quota produces the same payout as a 5% commission on a fair quota — but the rep's motivation and perception are very different. Quotas should be achievable by 60-70% of the team for the plan to drive behavior effectively.