Worked example
A $5,000,000 period with $400,000 of AE commissions, $90,000 for SDRs, $60,000 of manager overrides and $50,000 for sales engineers.
| Input | Value |
|---|---|
| Revenue for the period | $5,000,000.00 |
| Account executives (AEs) | $400,000.00 |
| SDRs / BDRs | $90,000.00 |
| Sales managers (overrides) | $60,000.00 |
| Sales engineers and other roles | $50,000.00 |
| Result | Value |
|---|---|
| Total commission rate | 12% |
| Total variable pay | $600,000.00 |
| AE share of variable pay | 66.67% |
| SDR / BDR share | 15% |
| Manager override share | 10% |
| Other roles share | 8.33% |
- + AEs: $400,000.00
- + SDRs / BDRs: $90,000.00
- + Manager overrides: $60,000.00
- + Other roles: $50,000.00
- = Total variable pay: $600,000.00
- ÷ Revenue: $5,000,000.00
- = Total commission rate: 12%
- AEs as % of revenue: 8%
- SDRs / BDRs as % of revenue: 1.8%
- Manager overrides as % of revenue: 1.2%
- Other roles as % of revenue: 1%
Formula
Total variable pay = AEs + SDRs/BDRs + manager overrides + other roles
Total commission rate = total variable pay ÷ revenue
Role share = role variable pay ÷ total variable pay
Use amounts earned for the same period as the revenue, not amounts paid, so that timing differences do not distort the rate. To find a single rep’s rate, use the commission rate calculator.
What to include
- AEs: commissions, accelerators and any bonuses tied to bookings or revenue.
- SDRs / BDRs: meeting or pipeline bonuses, even when they are not paid on revenue directly.
- Managers: overrides on team revenue and team bonuses. The manager override calculator estimates them.
- Other: sales engineers, partner managers, customer success commissions on expansion, SPIFFs.
Leave out base salaries, benefits and payroll taxes unless you want a fully loaded cost of sales; in that case, say so when you share the number.
Limitations
- The rate is a ratio for one period. Multi-year contracts and clawbacks can make one period look cheaper or more expensive than the plan intends.
- We do not publish target ranges for the total commission rate; it depends on margins, sales motion and growth goals. Compare against your own history and plan.
Frequently asked questions
What is the difference between commission rate and total commission rate?
A commission rate applies to one rep or one plan. The total commission rate adds every role paid variable compensation on the same revenue and divides by that revenue.
Should SDR pay count if SDRs are paid on meetings, not revenue?
If you want to know what it costs in variable pay to generate the revenue, yes. The calculator shows each role separately so you can also look at the AE-only rate.
Can I use bookings instead of revenue?
Yes, as long as variable pay and the denominator cover the same period and the same basis. Mixing bookings-based pay with recognized revenue gives a misleading rate.