How tiered commission works
Only the dollars inside each band get that band’s rate. If you sell $140k with bands at $50k and $100k:
- $0–$50k at 5%
- $50k–$100k at 8%
- $100k+ at 12%
Your effective rate is total commission ÷ total sales — usually between the lowest and highest band rates.
Why companies use tiers
- Encourage reps to push into higher bands.
- Protect margin on early or easy revenue with lower rates.
- Reward scale without jumping straight to an accelerator-only model.
Tiered vs accelerator
Tiers can start from the first dollar. Accelerators usually boost only the overage past quota. Many plans use one or the other; some use both.
Related tools
Editable multi-tier suite Accelerator guide SPIFF bonuses
FAQ
Is the highest rate paid on all sales?
Usually no — only on the top band slice, unless your plan is “retrospective” (rare; ask).
Can tiers go down at high volume?
Yes. Some plans decelerate after a point. Model carefully if rates fall.