Sales Compensation Calculator

The SaaS standard is 10% of annual contract value (ACV) as a baseline. This rate varies by segment: SMB deals under $25K typically pay 10-15%, mid-market deals pay 8-12%, and enterprise deals above $100K pay 5-8%. Your commission rate should be derived from your OTE and quota decisions, not set independently. The formula is: commission rate = variable compensation / annual quota. For industry-specific breakdowns, see QuotaPath's commission rates by industry report.

At seed stage, most startups offer AEs $100K to $150K OTE with meaningful equity. Series A companies typically pay $130K to $180K. The key is making the OTE achievable. Set quota at 3x to 4x OTE while you are still proving your sales motion, and offer a 3 to 6 month ramp with guaranteed variable pay. Below-market cash paired with strong equity works for experienced reps who believe in the product, but you will not attract proven closers with cash comp more than 20-25% below market.

OTE (On-Target Earnings) is base salary plus variable compensation at 100% quota attainment. Total compensation includes OTE plus benefits, equity, and any other perks. When discussing offers with candidates, be precise about which number you are quoting. Advertising $200K total comp when the OTE is $160K and the rest is benefits will erode trust. Most candidates evaluate offers primarily on OTE.

A ramp period is the time it takes for a new sales rep to reach full productivity. During this time, reps receive reduced quota expectations that increase incrementally until they hit 100% of their target, typically over 3 to 6 months for SMB roles and 6 to 12 months for enterprise. A common structure starts a new rep at 25% of quota in month one, steps up to 50% in month two, 75% in month three, and full quota by month four. Skipping a ramp period or making it too short drives early attrition: reps who miss quota in their first months due to an unrealistic ramp are more likely to disengage or leave before they ever have a chance to perform.

Almost never. Commission-only plans transfer all financial risk to the rep. They attract transactional sellers, not the consultative reps who build long-term customer relationships. They also create compliance headaches: in many states, commission-only reps must still earn at least minimum wage, and the reporting requirements are more complex. The only scenario where commission-only might work is for contract sales agents or referral partners, not full-time employees.

Review quarterly, update annually. Check quota attainment, rep satisfaction, and turnover data every quarter. If fewer than 50% of reps are hitting quota two quarters in a row, something is broken. Make structural changes at the start of a new fiscal year or at minimum a new quarter. Never change comp plans mid-quarter. Companies that re-evaluate their compensation plans annually are 40% more likely to meet or exceed revenue targets.