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COMPENSATION · GUIDE + TEMPLATE

The commission plan people trust.

Pay your sellers for the outcomes that matter, keep costs predictable, and put it in writing the way the law expects.

Inside:Four common plan structures · a worked early-stage example · the 10 terms every plan must define · state rules for CA, NY, IL, TX, and FL · an editable Word template
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Choosing a structure

Four common models.

There is no single right plan. Pick the structure that matches how mature your sales motion is.

StructureHow it worksBest for
Lump sum per dealA fixed amount paid for each qualifying deal signed.Very early sales, when deal sizes vary and logos matter more than revenue.
Percent of revenueA percentage of bookings or collected revenue from the customer.Products with predictable pricing and a steady sales cycle.
Quota and OTEA target total pay (base plus variable) tied to a quota, often with accelerators above 100%.Established sales teams with reliable forecasting and clear territories.
Milestone hybridSeparate payments at signing, at go-live, and on early revenue.Early-stage companies that need deals to launch, not just sign.

Rule of thumb: pay for the behavior you need right now, and plan to change it. An early-stage plan that rewards signed logos should shift toward revenue once the sales cycle is predictable.

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A worked example

The milestone hybrid, step by step.

An illustrative early-stage plan, designed to reward deals that actually launch. Amounts are examples only.

1
At signing

Signing commission

A lump sum, such as $5,000, when a new customer signs. Capped annually, for example at $50,000. New logos only. Free pilots don't count.

2
At go-live

Go-live commission

A second lump sum when the customer is live in production. Uncapped, but only for deals above a minimum expected revenue.

3
Quarterly

Revenue commission

A percentage of net revenue from the customer for the initial contract term. Renewals excluded.

4
Tiered

Rate tiers

Higher rates for better deals. For example, a top tier for fast go-lives with a guaranteed minimum, and a standard tier for everything else.

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Paid on one schedule

All three components pay out quarterly, at the end of the month after quarter close. Commission earned in Q1 is paid April 30. One date, every quarter, no surprises.

QuarterlyMonth after closeSame date every time
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Full guide

6 more pages in the full guide

Plus the editable Word template.