Sales Compensation Calculator
Model a comp plan properly: base and variable, tiered accelerators, decelerators and cliffs. Get total earnings, effective commission rate, and the cost of sale the plan produces at 80, 100, and 120 percent.
Pay mix
Enter base and variable as two figures, or one on-target earnings figure with the split. Switching between them keeps the same package. Use one period throughout: annual pay with an annual quota, quarterly with quarterly.
Quota and performance
Commission structure
Flat pays one rate on every dollar. Tiered pays band by band: the target rate up to quota, an accelerated rate only on the dollars past it, and optionally a reduced rate below a threshold.
Earnings across attainment
Same plan, three outcomes, each one base plus commission for the period. The spread between them is what the plan actually motivates.
How this works
How tiered commission is actually calculated
The mistake is applying the accelerator to the whole number once a rep passes quota. Almost no real plan works that way, and one that does creates a cliff edge where a single dollar of revenue swings earnings by thousands. Tiers are paid band by band: everything up to quota earns the target rate, and only the dollars above quota earn the accelerated rate. A rep at 120 percent on a 1.5x accelerator earns 100 percent of target variable on the first 100 percent plus 1.5x on the last 20 percent, so 130 percent of target variable in total, not 180 percent. On an 80,000 dollar target variable that is a 40,000 dollar difference, which is exactly why the two readings of the same plan document end up in front of a lawyer.
Quota should be 4x to 6x on-target earnings
The ratio between quota and OTE is the fastest sanity check on any plan. Below 3x, the comp line eats a margin most businesses do not have. Above 6x, attainment collapses and the plan stops motivating anything because reps quietly write off the accelerator in month two. The 4x to 6x band is where most B2B teams land, with lower multiples for long enterprise cycles and higher ones for transactional SMB motions. If your plan sits outside it, the fix is usually the quota, not the commission rate.
What cliffs and decelerators really do
A cliff pays nothing until a rep clears a threshold, typically 50 to 70 percent of quota, then pays on every dollar from zero once it is cleared. It protects the comp budget from persistent underperformance, and it has a predictable side effect: any rep who knows by week six that the cliff is out of reach stops closing this period and starts pushing deals into the next one. A decelerator pays a reduced multiplier below the threshold instead of nothing, which keeps the incentive alive without paying full freight for a miss. One detail plans get wrong: if you halve the rate below 70 percent and leave the rest alone, a rep who lands exactly on quota takes home only 65 percent of target variable. The rate between the threshold and quota has to be lifted to compensate, which is what this calculator does, and it is why the accelerator sits on top of a full on-target payout rather than a reduced one. If you run a cliff, count how many reps land in the ten points just underneath it. That cluster is the plan shaping behaviour, not the market.
Cost of sale, and what to compare it against
Total compensation divided by revenue closed gives the cost of that rep as a percentage. Take a 50/50 package with quota at 5x OTE: a rep at 100 percent attainment costs 20 percent of the revenue they closed, and the same rep at 70 percent costs about 24 percent, because base salary does not shrink when attainment does. That asymmetry is the whole reason underperformance is expensive: the fixed half of the package is paid either way, so cost of sale rises exactly when revenue falls. Compare the number against gross margin rather than against revenue before deciding whether a plan is affordable, and remember it excludes management, tooling, and the ramp of everyone who left.