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An Account Executive compensation plan that pays the same commission rate on all deals closed, regardless of quota attainment.

Account Executive

Single Rate Commission

A single rate commission plan, also called a flat rate commission plan or a fixed rate commission plan, pays set, non-changing sales commission rates on all deals. Unlike multiple rate commission plans, the commission rate doesn’t increase or decrease based on quota attainment, different products, longer contract terms, or any other variable. This is the most simple commission plan that salespeople may have.

$160K

On-Target Earnings

$200K

Quarterly Quota

$64K:$96K

Base:Variable

5x

Quota:OTE

Model your plan
Forecast Earnings

Split

40:60

Quarterly Quota Commission

$1-$30 million

ARR

Quota:OTE

A Quota to OTE Ratio of 4 - 8 is best.

Quarterly

Paths

Path 1: Quarterly Quota Commission

Path Description

Quota

$200,000 ARR quarterly

Type

Single Rate

Earnings Rule

12%

This plan only has one path: Single Rate Commission. As dictated, this path will pay the same rate on all deals regardless of quota attainment, product, contract length, etc.

Plan Examples

Sample Account Executive
Account Executive

Monthly quota:

$33,000 ARR

0-100% quota:

10% base rate

100% and above:

10% rate
Sample IT Sales Rep
IT Sales Rep

Quarterly quota:

$100,000 ARR

0-100% quota:

6% base rate

100% and above:

6% rate
Sample Insurance Rep
Insurance Rep

Monthly resale quota:

$20,000

0-100% quota:

15% base rate

100% and above:

15% rate

How to customize this plan

As with most compensation plans, the two major components that will vary across sales teams are:

Quota

First, you need to decide the quota period. This is the frequency at which a rep is held to that sales quota.

The most common quota periods are: quarterly (45% of plans), annual (25% of plans), and monthly (25% of plans) with 5% of plans having other frequencies (weekly, bi-weekly, semi-annually, etc.).

Once you decide that, you will need to determine a quota that is both low enough to be attainable and high enough to be valuable for your business. One way to do this is by using our Quota:OTE Ratio Calculator.

Commission Rate

Next, you’ll set your commission rate.

This plan features a single rate commission plan which is very simple to calculate for yourself. You would simply take the total variable compensation the rep is set to earn if they hit their target (for example, $60,000/year) and divide that number by their annualized quota/target from above (for example, $720,000/year).

Given those two examples, that would be $60,000/$720,000 = .0833 or 8.33% commission.

Frequently Asked Questions

Single rate commission plans are the simplest variable compensation plan out there. It’s for that reason that around 10% of all compensation plans follow this rule. The math is simple to calculate and since reps easily understand their compensation plans, they focus on closing deals rather than wasting time thinking about how to maximize their compensation.

No one got into sales because they love math… fortunately the math here is very simple. You take the variable compensation that a rep earns for hitting their target (say $50k a year) and divide that number by their target (say $500k a year). So it would be $50k/$500k which would give you .10 or 10% commission. Easy enough, right?

It certainly might be! If you’re looking to start out with a simple comp plan that gets the job done, you’re in the right place. It also allows you to add complexity to the plan via accelerators, bonuses, or SPIFs later on if you desire.

That’s up to you. Accelerators are a double-edged sword. While they can reward overperformance (good) they also add complexity to your compensation plan (bad). Around 80% of compensation plans include some sort of accelerator or decelerator, so you’d be in good company. However, it’s up to you if you want to add another layer to your sales commission plans.

Then this specific plan isn’t for you, but it might be close! If you want to offer a single rate commission for multiple products, you would simply want a plan with more than one single rate commission path. Calculating the commission rate for each of those paths is easy.Simply decide how much of a rep’s total variable compensation you want to dedicate to a product and then divide that number by how much you want your rep to sell of that product.

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Manage compensation & track commissions with QuotaPath

Deliver visibility, automation, and seamlessness across the entire compensation process.

Compensation Hub provides RevOps, Finance, and Sales teams with a free sales compensation plan modeling tool to design meaningful comp plans in a few steps. Built by QuotaPath, a sales compensation and commission software, Compensation Hub includes sales compensation plan examples (including AE and SDR comp plans), a library of commission structure templates, and variable compensation recommendations and use cases for each plan. Each commission plan or bonus structure features adjustable variables so that leaders can create plans aligned with their business goals and historical numbers. These variables include on-target earnings (OTE), annualized quota, average contract value (ACV), annual recurring revenue (ARR), quota frequency, and more. Once a plan is ready, leaders can easily share it within their organizations and save it to see it automated in QuotaPath's free commission tracking software. For additional comp management support, and to learn how QuotaPath is helping teams everywhere bring visibility and accuracy to sales comp, book time with their team for a custom demo.

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