Commission Plan Calculator
Commission plans are the financial backbone of a sales organization. They align rep incentives with company revenue goals, reward overperformance, and create a direct link between effort and earnings. A well-designed commission plan pays competitive OTE (On-Target Earnings) at quota, applies a clear accelerator above 100%, and is simple enough that reps can calculate their earnings in real time. This calculator lets you model commission earnings across the full attainment range, from below-floor performance to breakthrough years. Enter base salary, quota, commission rate, and accelerator to see commission at any attainment level plus projected total annual earnings.
Commission plan formula
OTE = Base Salary + (Quota * Commission Rate)
Commission (at or below quota) = Revenue * Rate
Commission (above quota) = Quota * Rate + (Revenue - Quota) * Rate * Accelerator
Total Earnings = Base Salary + Commission
Commission plan design principles
- OTE should be 5x to 10x the target ARR per rep for sustainable unit economics.
- 50/50 base-to-variable split is common; 60/40 for inside sales, 40/60 for enterprise.
- Accelerator of 1.5x to 2x above quota rewards overperformance meaningfully.
- A commission floor at 50 to 70% attainment protects low performers while maintaining incentive.
Commission plan: frequently asked questions
What is OTE in sales?
OTE (On-Target Earnings) is the total compensation a sales rep earns when they hit exactly 100% of quota. It includes base salary plus commission at 100% attainment. OTE is the benchmark for hiring and comparing comp plans.
What is a standard sales commission rate?
Commission rates vary widely. Inside sales for SaaS typically run 6 to 12% of ARR sold. Field enterprise sales may be 5 to 8%. Transactional or low-margin products may pay 2 to 5%. The key benchmark is OTE vs quota, which is typically 5x to 10x.
What is a commission accelerator?
An accelerator is a higher commission rate applied to revenue above quota. Common accelerators pay 1.25x to 2x the base rate for revenue above 100% attainment, incentivizing reps to overperform.
What is a draw against commission?
A draw is an advance on future commissions paid when commissions are expected but not yet earned. Recoverable draws must be paid back if commissions fall short. Non-recoverable draws are effectively a floor on pay.
How do I design a commission plan?
Set OTE at 5x to 10x the target ARR per rep. Split roughly 50/50 between base and variable. Apply 0% below a 50 to 70% floor, standard rate to 100%, and accelerator above 100%. Keep the plan simple enough for reps to calculate in their heads.
Sources
- U.S. Department of Labor - FLSA: Fair Labor Standards Act.
- U.S. Bureau of Labor Statistics: Sales and Related Occupations Wages.
Reviewed by the CalculatorHub team, edited by James Graham, 14 June 2026. See our methodology.