Enter your base, sales, rate, and quota — see your commission for the month, including accelerator pay above quota, and your effective annual pace.
The commission formula (with accelerators)
up to quota: sales × base rate
above quota: (sales − quota) × accelerator rate
total pay = base salary + both commission pieces
Accelerators exist because the last dollars of the month are the hardest to close — plans reward them at a higher rate. If your plan has tiers instead (different rates at 80%, 100%, 120% of quota), run each tier's slice separately with the same logic.
A worked example
$4,000 base, $50,000 in sales against a $40,000 quota, 5% base rate with an 8% accelerator: the first $40,000 pays $2,000, the $10,000 above quota pays $800, so the month totals $6,800 — an annualized pace of $81,600. Notice the accelerator made the over-quota sales worth 60% more per dollar; that's the incentive doing its job.
Reading a comp plan before you sign
Three questions catch most surprises: Is commission paid on booking or on cash collected? Is there a cap (a ceiling on commission no matter how much you sell)? And is any of the base a "draw" — an advance against future commission that you effectively pay back? Each of these changes what an identical headline rate is really worth.
Frequently asked questions
How is commission calculated?
Multiply eligible sales by your commission rate. With a $40,000 month at 5%, commission is $2,000. Plans often add accelerators — a higher rate on sales above quota — so the same dollar of sales can be worth more late in the period.
What is a typical commission rate?
It varies enormously by industry: 5–10% is common in SaaS sales on new business, 1–3% in high-ticket goods, 20–40% of gross margin in some services. What matters is the whole plan — base, rate, quota, and accelerators — not the headline rate alone.
What does OTE mean?
On-Target Earnings: base salary plus the commission you'd earn at exactly 100% of quota. A '$120k OTE, 50/50 split' role pays a $60k base and another $60k in commission if you hit quota — more above it, less below.
How is commission taxed?
As supplemental wages, like a bonus: typically a flat 22% federal withholding plus Social Security, Medicare, and state tax when paid separately from base salary. It's all ordinary income at filing time.