What residual commission means
Instead of a one-time payout on a closed deal, you earn a percentage of ongoing subscription, premium, or retainer revenue while the customer remains. Rules vary: some pay residuals only for year one, others forever (with conditions).
Why churn matters
If accounts cancel, your book shrinks and residual checks fall. A small monthly churn compounds. Use the churn field to see a conservative 12-month picture. The full suite also models new MRR added each month.
Residual vs SPIFF vs one-time commission
- One-time commission — paid on the close (or first invoice).
- Residual — paid over time on recurring revenue.
- SPIFF — short promo on top of either structure.
Questions to ask
- How long do residuals last after you leave the company?
- What happens on downgrades, pauses, or non-payment?
- Is residual on gross MRR or net of discounts/refunds?
- Do team deals share residual credit?
Related tools
Full residual tool OTE guide AE/SE split
FAQ
Is residual the same as royalty?
Similar idea (ongoing %), but residual commission is usually an employment/comp-plan concept, not IP royalties.
Can residuals replace OTE variable?
Some plans blend both. Always model first-year cash vs long-term residual stream separately.