How sales commission plans work
Flat commission
A single percentage on all sales. Simple to explain and calculate: ₹6,00,000 at 3% is ₹18,000.
Tiered (progressive) slabs
Each rate applies only to the sales within its band, like income tax. With 2% up to ₹2 lakh, 3% up to ₹5 lakh and 5% above, ₹6 lakh earns ₹4,000 + ₹9,000 + ₹5,000 = ₹18,000.
Tiered plans reward extra effort without big jumps at slab boundaries.
Whole-amount slabs
The rate of the slab reached applies to all sales. ₹6 lakh at the 5% slab earns ₹30,000. This motivates people to cross thresholds, but creates big jumps around each limit.
Tracking targets and incentives
SAS CRM tracks each salesperson's leads, deals and won value, so incentive calculations start from accurate numbers.
- Agree the plan in writing before the period starts
- Decide whether commission is on order value, invoice value or collections
- Review slabs every quarter against margins
