How sales commission works

No percentages appear on this page, and none ever will. The page explains the mechanics. Your own rates are on your own pay page.

If sales is your role

Two things decide your commission each month.

1. How many deals closed that month. The number of deals sets your tier.
2. How much cash arrived that month. Your tier's rate is worked out on the cash, not on the size of the deals you closed.

Both are counted fresh every month.

Your tier

Four deals a month is the target. Below four is Tier 1.

Your tier is based on the deals you close each month.

If sales is not your role

Some people here do work that leads to a sale without selling being their job. You earn commission the same way, and two different things decide it.

1. The part you played in the sale. Your own pay page sets a rate against each part.
2. How much cash arrived that month.

You have no tier, no target and no minimum number of deals. Nothing on this page about tiers applies to you.

What the rate is worked out on

What the client buys. A client can buy one time tax work, or monthly recurring services, or both. A client who signs a bigger plan is worth more to you, and a smaller one is worth less.

The cash that arrives, not the deal you signed. The firm only pays commission on money it has received from the client.

When a deal counts

A deal counts in the month the client's first payment clears the bank, not the month it was signed. Typically the client signs the contract and pays on the same day. A deal signed on the last day of one month and paid in the next counts in the next.

When you are paid

Commission is paid the month after the money arrives.

An example. A client pays in January. Your commission on that payment reaches you in February.

You will have a tracker showing your commission each month. A custom one is being built, so until it is ready the figure comes to you from the firm.

A client keeps paying you

A client on a monthly plan pays you commission every month for their first year with the firm, or until you leave, whichever comes first.

So a deal you close in March keeps paying you in April, May and every month after, for as long as that client keeps paying the firm.

What that means for a new month. Your commission is not only the deals you closed this month. It is every client still paying whose deal you closed, plus the new ones.

Five things people ask

1. Does a client who cancels take my commission back? No. You keep what was paid on the cash that already arrived. You stop earning on the months that never happen.
2. Does a client who pays late cost me the month? Clients are billed on the 1st of the month, which gives you the rest of the month to get them to pay and keeps your commission consistent.
3. What if I close a deal and somebody else does the work? Closing is what commission pays for. Whoever delivers the work is paid separately for delivering it. If you do both, you are paid separately for both.
4. What if two of us worked on a sale? Every way of sharing a sale has its own rate, and they are on your own pay page.
5. Does my tier reset if I have a bad month? In a sales role, yes, both ways: one weak month does not follow you and one strong month does not cover the next. If sales is not your role, you have no tier for a month to reset.

Where your own numbers live

Your rates are on your own pay page, with your base.