Sales Commission Calculator

Types of commission structures

• Straight commission: 100% of income comes from commissions. High risk, high reward. Common in real estate and door-to-door sales.
• Base + commission: a guaranteed base salary plus commission on top. Most common in B2B and SaaS sales.
• Tiered commission: commission rate increases after hitting certain thresholds. Motivates high performers. E.g., 5% on first $10,000, 8% on $10,001–$25,000, 10% beyond.
• Residual commission: ongoing commissions on recurring revenue (subscriptions, insurance renewals). Builds passive income over time.

On-target earnings (OTE)

OTE is the total expected compensation (base + commission) if a salesperson hits 100% of their quota. A typical OTE split is 50/50 or 60/40 (base/commission) in enterprise sales.

Draw against commission

A draw is an advance payment against future commissions. It provides a minimum income floor during slow periods or ramp-up time for new hires. The draw is then recovered from commissions earned.

• Recoverable draw: the advance must be paid back from future commissions. If a rep earns $3,000 in commission but received a $5,000 draw, they owe the $2,000 deficit. The debt can carry forward to future periods, creating a "draw hole" that is difficult to escape.
• Non-recoverable draw: if the rep doesn’t earn enough to cover the draw, the deficit is forgiven. This is effectively a salary floor and carries more risk for the employer. Common for onboarding new territory reps.

Commission plan comparison: hypothetical earnings