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Sales Commission Plan Template (with Commission Calculator)
Sales commission plan template with OTE split, quota, accelerators, caps, clawbacks and draws, plus a tiered commission calculator and monthly tracker.
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What you get
- A plan document covering eligibility, quota, OTE split, rates, accelerators, decelerators, caps, clawbacks, draws, split deals, and termination
- A tiered commission calculator with four worked rep examples and a threshold-crossing month
- Recoverable versus non-recoverable draw math shown month by month
- A 12-month commission tracker with sample rows and blank rows
- Compliance notes on California Labor Code 2751 and final-pay rules for earned commissions
Template preview
A preview of the structure. Download the PDF or CSV for the complete, ready-to-use version.
Plan summary
- Plan period— e.g. January 1 to December 31, 2027
- Eligible roles— e.g. Account Executive, Senior Account Executive
- On-target earnings (OTE)— e.g. $150,000
- Pay mix (base / variable)— e.g. 50/50: $75,000 base, $75,000 target commission
Commission rate tiers (cumulative, year to date)
Each tier's rate applies only to bookings inside that tier, like tax brackets.
| Tier | Attainment | Bookings range | Rate | Multiple of base rate |
|---|---|---|---|---|
| 1 | 0 to 100% | $0 to $750,000 | 10% | 1.0x |
| 2 (accelerator) | 100 to 150% | $750,001 to $1,125,000 | 15% | 1.5x |
| 3 (accelerator) | Above 150% | Above $1,125,000 | 20% | 2.0x |
Commission calculator: worked examples
| Rep | Annual bookings (attainment) | Formula | Commission | Total cash comp |
|---|---|---|---|---|
| A | $600,000 (80%) | $600,000 x 10% | $60,000 | $135,000 |
| B | $750,000 (100%) | $750,000 x 10% | $75,000 | $150,000 |
| C | $900,000 (120%) | $750,000 x 10% + $150,000 x 15% | $75,000 + $22,500 = $97,500 | $172,500 |
| D | $1,200,000 (160%) | $750,000 x 10% + $375,000 x 15% + $75,000 x 20% | $75,000 + $56,250 + $15,000 = $146,250 | $221,250 |
Threshold-crossing month
When a month's bookings cross a tier line, split them. Example: a rep has $700,000 year to date and books $120,000 in October, reaching $820,000. The first $50,000 fills Tier 1 at 10% ($5,000) and the remaining $70,000 falls in Tier 2 at 15% ($10,500). October commission = $15,500.
1. Eligibility and plan period
Name the roles covered, the start and end dates, and when a new hire becomes eligible (for example, first full month of employment, with a prorated quota of annual quota x remaining months / 12). Participants on a leave of absence have quota adjusted for the months away. The company may amend the plan with [30] days' written notice; changes apply only to bookings after the notice date.
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How to use this template
- 1
Set OTE and quota
Pick on-target earnings for the role, split it into base and variable (50/50 or 60/40 are common), and set a quota that most reps can realistically hit.
- 2
Derive the base rate
Divide target variable pay by quota to get the commission rate at 100% attainment, then set accelerator and decelerator tiers around it.
- 3
Write the rules down
Fill in every section of the plan document, especially when commission is earned, clawback triggers, and what happens at termination.
- 4
Get signatures
Have every rep sign the plan before the plan period starts and keep a signed copy on file; California and several other states require written commission agreements.
- 5
Track monthly
Log bookings in the monthly tracker, calculate commission on cumulative year-to-date attainment, and reconcile with payroll each pay period.
Frequently asked questions
How do you calculate sales commission?
Multiply bookings by the commission rate for each tier they fall into. With a 10% base rate up to a $750,000 quota and 15% above it, $900,000 in bookings earns $75,000 + $22,500 = $97,500. Always calculate on cumulative year-to-date attainment so accelerators apply correctly.
How do you set the commission rate?
Divide target variable pay by quota. A rep with $75,000 target commission and a $750,000 quota has a 10% base rate. That way a rep at exactly 100% of quota earns exactly their OTE.
What is a typical OTE split for sales reps?
50/50 is common for new-business account executives with short sales cycles. 60/40 or 70/30 is more typical for roles with long cycles, heavy account management, or less direct control over the close, such as enterprise or customer success roles with renewal quotas.
What is the difference between a recoverable and non-recoverable draw?
A recoverable draw is an advance: if the rep earns less than the draw, the shortfall is deducted from future commissions. A non-recoverable draw is a guaranteed minimum that is never paid back. Non-recoverable draws are typical for a new rep's ramp period.
Can you claw back commission after an employee leaves?
It depends on how the plan defines when commission is earned and on state wage-deduction law. Once commission is earned under the plan it is generally treated as wages, and many states restrict deductions from final pay. Write clawback triggers and the earned date into the plan and have counsel review them.
Does a commission plan need to be in writing?
In California, yes: Labor Code 2751 requires a written contract describing how commissions are computed and paid, with a signed copy given to the employee. Other states have similar rules, and a written plan signed before the period starts prevents most commission disputes anywhere.