--- title: What's a Typical Commission for a SaaS Salesperson? [Really 10%?] description: What is a typical SaaS sales commission? Compare five common compensation models, six rules to follow and the factors that set the right rate for your team. image: https://incredo.co/hubfs/incredo-blog-sales-pipeline-1.png --- [Skip to main content](https://incredo.co/blog/whats-typical-commission-for-saas-salesperson#main) [![logo](https://incredo.co/hubfs/logo.svg) ![logo](https://incredo.co/hubfs/logo.svg)](https://incredo.co?hsLang=en-us) - [Services](https://incredo.co/services) - [Company](https://incredo.co/about) - [Case Studies](https://incredo.co/case-studies) - [Career](https://incredo.co/careers) - Show submenu for Saas Library Saas Library - [Ebooks](https://incredo.co/ebooks) - [SaaS Influencer Marketing](https://incredo.co/saas-influencer-marketing) - [Key Saas Metrics That Matter](https://incredo.co/key-saas-metrics-that-matter-for-your-business-growth) - [Blog](https://incredo.co/blog) - [Contact](https://incredo.co/contact) Open main navigation Close main navigation - [Services](https://incredo.co/services) - [Company](https://incredo.co/about) - [Case Studies](https://incredo.co/case-studies) - [Career](https://incredo.co/careers) - Show submenu for Saas Library Saas Library - Saas Library - [Ebooks](https://incredo.co/ebooks) - [SaaS Influencer Marketing](https://incredo.co/saas-influencer-marketing) - [Key Saas Metrics That Matter](https://incredo.co/key-saas-metrics-that-matter-for-your-business-growth) - [Blog](https://incredo.co/blog) - [Contact](https://incredo.co/contact) - [Book A Call](https://incredo.co/contact) [Book A Call](https://incredo.co/contact?hsLang=en-us) # What's a Typical Commission for a SaaS Salesperson? \[Really 10%?\] ![Aida Grigoryan](https://incredo.co/hs-fs/hubfs/49119161_743382082697453_2946044099846733824_n.jpg?width=50&height=50&name=49119161_743382082697453_2946044099846733824_n.jpg) by [Aida Grigoryan](https://incredo.co/blog/author/aida-grigoryan) May 24, 2024 What's a Typical Commission for a SaaS Salesperson? \[Really 10%?\] 14:52 Asking "what is a typical commission for a SaaS salesperson?" is like asking "how should I price my product?" The honest answer is that it depends on your deal size, sales cycle, margins and goals. You will see 7%, 9% and 10% quoted everywhere, but a number copied from the internet is a starting point, not a plan. This guide shows you how to find the right answer for your company. We cover the five most common SaaS compensation models, six rules worth following, the factors that should move your rate up or down, and eight ways to help your sales team perform better. ## Five common SaaS sales compensation models ### Commission only, no base salary **Pros:** You only pay when a rep brings in paying customers, which is attractive for early-stage companies with little funding. Reps who work hard and smart can earn a lot. **Cons:** Strong candidates are harder to attract because income is not guaranteed. Reps may rush to close and skip qualification. You also usually need to offer a higher commission rate than you would alongside a base salary. ### Base salary plus commission **Pros:** Reps get predictable income and you can plan your costs. People do not start every month from zero, so they sell with more confidence. **Cons:** A higher base usually means a lower commission rate. This model works best when your growth is steady and you can offer a fair base. ### Profit-based commission **Pros:** You pay on net revenue after delivery, support and other costs, which protects your margins and discourages heavy discounting. **Cons:** Reps see a smaller number than the deal value. It works best when deals are large or your costs to serve are low. ### Tiered commission **Pros:** You pay a base rate up to quota and a higher rate above it, so top performers are rewarded for going beyond the target. **Cons:** The rates need careful design so you do not strain your budget or demotivate reps. ### Residual commission **Pros:** Reps are paid again when customers renew, which encourages them to bring in customers who stay. **Cons:** If customer success owns retention, paying sales for renewals muddies accountability and adds KPIs that can distract closers. ![SaaS sales compensation planning](https://incredo.co/hs-fs/hubfs/Imported_Blog_Media/photo-1531190260877-c8d11eb5afaf-1.png?width=750&height=500&name=photo-1531190260877-c8d11eb5afaf-1.png) ## Six rules to follow whatever model you choose 1. **Consider a 50/50 split of base and commission.** This is a common starting point for SaaS teams. Adjust it for your market and stage. 2. **Pay commission on new business.** Sales owns winning new customers. Retention belongs to customer success and marketing, so reward it there. 3. **Set quotas relative to on-target earnings (OTE).** Many companies set quota at several times OTE. If a rep's OTE is $3,000 a month and quota is $30,000, a 10% rate pays out the variable half of OTE at quota. 4. **Be careful with discounts.** Discounts reduce deal value and commission. Make sure reps understand the impact before they offer one. 5. **Pay commission on expansion revenue based on the added amount.** If a $10,000 customer grows to $14,000, calculate commission on the $4,000 increase. 6. **Pay when you get paid.** Put the payout timing in the contract, usually after the customer's cash is received, and define what happens if a customer cancels or refunds. ![Sales call](https://incredo.co/hs-fs/hubfs/Imported_Blog_Media/photo-1516055619834-586f8c75d1de-1.jpg?width=750&height=500&name=photo-1516055619834-586f8c75d1de-1.jpg) ## Seven factors that set your commission rate 1. **Market benchmarks.** Compare similar SaaS companies in your region and segment, then treat the result as context, not the answer. 2. **Net revenue and margins.** You also pay engineering, marketing and support, so your rate has to fit your unit economics. 3. **Contract length.** Longer commitments are harder to win and usually deserve higher pay. 4. **Upfront cash.** Annual prepayment helps your cash flow and can justify a higher rate than monthly billing. 5. **Quota period.** Short sales cycles suit monthly quotas. Longer cycles suit quarterly quotas, and the rate may need to change with the period. 6. **Performance above quota.** Plan higher rates for revenue beyond target. 7. **Strategic customers and channels.** You may want to pay more for target accounts, or for pipeline reps generate through outbound rather than from your existing database. ## Eight ways to build a high-performing SaaS sales team 1. **Give new reps time to master the product.** They need to know whether and how it solves a prospect's problem. 2. **Teach sales the marketing basics.** Reps should know your buyer personas and buyer's journey so they avoid poor-fit customers. 3. **Align sales and marketing.** Share which content and channels bring the best leads and customers. 4. **Invest in training.** Document the techniques and principles you want every rep to use. 5. **Let reps help choose rewards.** Money is not the only motivator. 6. **Give constructive feedback.** Review calls and results, not only misses. 7. **Set challenges.** Reward milestones such as a large account or an upfront annual contract. 8. **Raise rates once quota is met.** Accelerators keep top performers motivated. ## Summing up Research how others pay their reps, then build a plan around your own numbers: margins, sales cycle, deal size and goals. A simple plan that reps understand beats a clever one they do not. ## Make your compensation plan measurable in HubSpot A commission plan only works if you can trust the data behind it: deals, amounts, close dates, pipeline stages and payments. If your HubSpot portal cannot report on these cleanly, you will argue about the numbers instead of coaching the team. [Book a 30-minute HubSpot portal review](https://incredo.co/meetings/artash?hsLang=en-us) and we will show you where to start. **Tags:** [SaaS Sales](https://incredo.co/blog/topic/saas-sales) ![Aida Grigoryan](https://incredo.co/hs-fs/hubfs/49119161_743382082697453_2946044099846733824_n.jpg?width=50&height=50&name=49119161_743382082697453_2946044099846733824_n.jpg) Post by [Aida Grigoryan](https://incredo.co/blog/author/aida-grigoryan) May 24, 2024 Aida is the wordsmith of Incredo who is passionate about writing everything SaaS. Has proven experience both as a content writer and translator, is interested in exploring the Middle East and learning Turkish. She is always travelling somewhere new - the next destination is Israel! 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