Commissions and Commission Status Glossary

Commission

Commission is variable pay tied to sales revenue, unit sales, profit, or some other volume-based metric.

Commission (% rate per deal)

A commission calculation where the sales rep receives a percentage that is applied to the net result of the plan's credit rule.

Commission (amt per widget)

A commission calculation where the sales rep receives a flat amount that is applied to the net result of the plan's credit rule. The same as % rate per deal however instead of using a percentage (e.g. 100%) it uses decimals (e.g. 1.00)

Commission Accruals

Accruals are the estimation of payment expenses based on earnings. Because of the large amount of money spent on commissions, it is customary for the compensation administrator to calculate accruals prior to the actual payment of commissions.

Commission Earnings

Commission earnings are determined by the credit amount of the commissionable event times the commission rate. Once a commission is earned, the company must track the expense as a liability even if they don't pay the earnings until a later event. For example, earnings can be calculated at booking but the payment doesn't occur until cash receipt.

Commission Payment

Commission payment is the amount of commission paid to the Participant. It may occur at a different time than earnings. See commission accruals.

Commission Rate

The commission rate is the rate applied to the volume measure for incentive payment. It can be expressed as a percent of dollars. The commission rate is multiplied by the volume measure to calculate the commission earned.

Individual Rate

A commission rate that is unique per individual instead of per plan.

Milestones

A synonymous term for 'Event'. See 'Event' for a full explanation.

Hurdle

A hurdle is similar to a threshold but based on a different measure than the one that is being measured for payout.

Shipment Date

The shipment date is the date the order was shipped by the company or channel partner.

Status

The current status of a commission, whether it is being calculated, held, released, or deleted.