Sales Compensation: Strategy, Structures & Examples for Modern Revenue Teams

Sales compensation is the total package of pay and incentives you offer to people who generate revenue – from base salary to variable pay like commission, bonuses, and SPIFs. When it’s designed well, it aligns every rep with your go-to-market strategy, drives predictable performance, and keeps top performers engaged.

This pillar guide explains what a sales compensation plan includes, how different structures work, and how modern teams move from spreadsheets to automation. It’s written for B2B SaaS leaders, but the principles apply to most recurring revenue businesses.

If you’re starting from scratch or untangling legacy plans, you may also want to zoom out and read our broader Incentive Compensation Guide for context on variable pay across the organisation.

What Is Sales Compensation?

Simple definition

Sales compensation strategy is the way you use pay to drive, reward, and sustain sales performance. It covers how much is paid, what is fixed vs variable, which metrics you reward, and how the rules are communicated and governed.

Practically, sales compensation combines:

• A base salary that provides stability.
• Variable pay for sales reps that rises and falls with results.
• Clear mechanics (commission, bonus, SPIFs, OTE, KPIs) that link pay to behaviour.

Done right, sales compensation tells every rep a simple story: “Here’s what great performance looks like, and here’s exactly how you’ll be rewarded for delivering it.”

Components of sales compensation

Most modern plans mix several components:

• sales compensation structure (the overall design) – how base and variable pay fit together, and which roles participate in which plans.
• Base salary – fixed pay that reflects role, seniority, and market benchmarks.
• Commission / incentive pay – variable pay directly tied to revenue, profit, or key metrics. See our Sales Commission Guide for deeper detail.
• Bonuses and SPIFs – lump-sum rewards and short-term contests layered on top of core plans. Explore the Bonus Guide and SPIF Guide for examples.

• Non-cash incentives – recognition, experiences, or other rewards that complement financial incentives.
• On-Target Earnings (OTE) and pay mix – how you split pay between base and variable, and what an average performer can expect to earn at 100% of target. See our On-Target Earnings Guide.

Together, these elements form the foundation of sales compensation models you can adapt for different roles and sales motions.

Sales Compensation vs Commission, Bonuses & SPIFs

Sales compensation vs sales commission

Commission is one mechanism inside a broader sales compensation programme. A commission plan usually pays a percentage of revenue or margin on each deal. Your overall plan also includes base salary, bonuses, SPIFs, and non-cash rewards.

In other words, sales compensation vs commission is the difference between the entire system and one important component. For a deeper dive into commission mechanics, see our dedicated Sales Commission Guide.

Sales compensation vs bonus pay

Bonuses are typically periodic, lump-sum payments (monthly, quarterly, or annually). They work well when you want to reward team-based outcomes or longer cycles – for example, company EBITDA, regional performance, or cross-functional projects.

Commission-based sales performance compensation is better when you want tight alignment between individual deals and pay. Bonuses are stronger when you need flexibility, a wider set of metrics, or shared accountability. Our Bonus Plans Guide explores common structures and use cases.

Where SPIFs and contests fit

SPIFs (Sales Performance Incentive Funds) are tactical, short-term accelerators. You might launch a SPIF for a new product, a quarter-end push, or a specific behaviour like multi-year contracts.

They sit on top of your core plan and should be time-bound, tightly scoped, and easy to understand. Learn how to design effective SPIF campaigns in our SPIF Guide.

How everything rolls up into OTE

On-Target Earnings (OTE) represent the total expected annual pay when a rep hits 100% of their goals. It includes base pay, commissions, bonuses, and any predictable incentives.

Your OTE design ties all the moving pieces together. If your OTE, quotas, and plan mechanics don’t line up, reps will either miss earnings expectations or your cost of sales will spike. For deeper guidance, see our On-Target Earnings Guide.

Principles of Effective Sales Compensation Design

Align pay with business and go-to-market strategy

Great sales compensation examples all start from the same place: strategy. Before you talk about rates or tiers, decide what you’re trying to drive.

• New logo vs expansion vs renewals.
• Product mix (e.g. core platform vs add-ons).
• Market segment (SMB vs mid-market vs enterprise).
• Channel strategy (direct, partner, PLG, or hybrid).

Your plan should point reps toward the outcomes that matter most over the next 12–24 months, not last year’s priorities.

Balance base vs variable pay (pay mix)

Pay mix is the percentage split between fixed and variable pay. For example, a 60/40 mix means 60% base, 40% variable at target.

Typical ranges (illustrative only):

• SDR / BDR: 70/30 – heavier base for pipeline-focused roles.
• Mid-market AE: 50/50 – strong upside for direct revenue owners.
• Account Manager / CSM: 80/20 – more stability, with incentives for renewals and expansion.

There is no single best pay mix. The right answer depends on deal control, sales cycle length, and the risk profile in your market.

Keep plans simple, fair and transparent

Salespeople perform best when they can explain their plan on a whiteboard in under two minutes. Limit metrics to two or three per role and avoid hidden adjustments.

Clarity reduces disputes, supports trust, and makes it easier to scale. If your team needs a spreadsheet to understand their pay, that’s a signal your plan is too complex.

Reward the right behaviours, not just outcomes

Revenue is critical, but it’s not the only thing that matters. For recurring revenue businesses, leading indicators and customer health are just as important.

Consider KPI-based sales compensation that blends results (ARR, renewals, margin) with behaviours (qualified pipeline, multi-threading, product mix) – especially for roles where influence is shared across teams.

Governance, documentation and change management

Every plan should come with a clear, accessible document: eligibility, definitions, examples, edge cases, and approval workflows. This is where many organisations underestimate the importance of good governance.

Strong governance makes it easier to roll out changes, handle exceptions, and keep finance, HR, and sales aligned. Modern ICM platforms like Bentega also help enforce rules, approvals, and audit trails automatically.

Common Sales Compensation Models & Structures

There’s no universal best model. The right SaaS sales compensation approach depends on your motion, deal sizes, and team structure. Most teams use a mix of the models below, tailored by role.

Salary plus commission (most common)

This is the standard for many AE and AM roles: a competitive base salary plus commission on closed business. It offers stability with meaningful upside.

• Pros: Predictable for both the business and the rep; easy to communicate.
• Cons: Can feel "flat" if commission rates are too low or quotas are misaligned.
• Best for: Core new-business and expansion roles in repeatable sales motions.

Commission-heavy plans

Commission-heavy or "eat what you kill" models put a larger share of earnings at risk. They work in high-velocity, transactional environments where individual control is very high.

• Pros: Strong motivation for top performers; variable cost base.
• Cons: Income volatility, risk of short-termism, harder ramp for new hires.
• Best for: Highly transactional roles, some outbound hunters, and certain partner sales structures.

Salary plus performance bonus

In some roles, especially where revenue is shared, a bonus-based model works better than deal-by-deal commission. You define targets (e.g. NRR, CSAT, regional ARR) and pay a bonus when those goals are met.

• Pros: Encourages collaboration and shared accountability.
• Cons: Less direct line between individual deals and pay.
• Best for: Sales leaders, customer success, and cross-functional teams.

Profit- or margin-based compensation

Where discounting and deal structure matter, you may want to reward margin rather than top-line revenue. Reps earn more when they maintain healthy pricing and sell higher-value packages.

• Pros: Aligns behaviour with profitability and sustainable growth.
• Cons: Requires reliable cost data; can be harder to explain.
• Best for: Multi-product companies, complex pricing, and partner-heavy models.

Team-based and overlay compensation

For pods, overlay roles, or channel teams, team-based incentives can be more effective than individual quotas. You might combine a team target with individual modifiers.

• Pros: Supports collaboration on complex deals.
• Cons: Risk of free-riding if metrics aren’t designed carefully.
• Best for: Enterprise accounts, cross-functional pods, or partner/alliances roles.

Hybrid models for SaaS companies

Many SaaS organisations blend multiple elements into hybrid plans: new ARR commissions, renewal/expansion incentives, SPIFs, and bonuses tied to NRR or product adoption.

Hybrid plans allow you to reward the full lifecycle – acquisition, onboarding, renewal, and growth – without forcing one structure onto every role. For ideas on how to structure commission mechanics inside these plans, see our Sales Commission Structure Guide.

How to Design a Sales Compensation Plan (Step-by-Step)

This section walks through how to design a sales compensation plan that aligns with your strategy and scales with your business. Use it as a checklist for new plans or annual redesigns.

Step 1 – Clarify roles, goals and sales motion

Start with a simple role map: SDR/BDR, AE, AM/CSM, overlay/SE, managers, and leaders. Document who owns which part of the funnel and which revenue streams (new ARR, expansion, renewals).

Hunter roles (e.g. new-business AEs) might get more upside tied to new ARR, while farmer roles (e.g. AMs, CSMs) focus on retention and expansion. Your compensation should mirror this split.

Step 2 – Define pay mix and OTE

Next, define target On-Target Earnings and the mix between base and variable pay for each role. Validate your numbers against market benchmarks and unit economics.

Sanity check: if a rep hits 100% of quota, does their OTE feel competitive and fair?

And can you afford to pay full attainment across the team without breaking your cost-of-sales model?

Step 3 – Choose KPIs and performance metrics

Choose a short list of KPIs that reflect success for each role – typically a mix of revenue, pipeline, and retention metrics. For example, AEs might be measured on new ARR and multi-year contracts; CSMs on NRR and churn; SDRs on qualified meetings or pipeline created.

For more detail and formulas, see our KPIs & Metrics Guide.

Step 4 – Design mechanics: rates, tiers, accelerators, caps

With KPIs defined, you can design the mechanics that your sales compensation software will eventually automate: commission rates, tiers, accelerators, thresholds, and any caps.

• Keep formulas as simple as possible.
• Use tiers and accelerators to reward overperformance rather than complex carve-outs.
• Avoid hard caps wherever you can – they discourage your best performers.

For mechanical examples, see our guides on sales commission and commission structures.

Step 5 – Model scenarios and total cost of compensation

Before rollout, model best-, expected-, and worst-case scenarios. What happens if 20%, 60%, or 100% of reps exceed quota? What does that do to your total incentive spend and profitability?

This is where finance and RevOps pressure test assumptions and confirm that plan design supports both growth and margin.

Step 6 – Governance, approvals and communication

Agree who signs off on plans, how exceptions are handled, and where documentation lives. Create a one- to two-page summary for each role, plus a full terms and conditions document for legal alignment.

Announce changes early, hold Q&A sessions, and give managers enablement materials so they can confidently explain the plan to their teams.

Step 7 – Review and iterate

Treat sales compensation as a living system. Review performance, attainment, and rep feedback at least annually, and ideally every two quarters.

Look for signs of breakage: large pockets of under- or over-attainment, disputes, or behaviours that don’t match your strategy. Iterate carefully rather than reinventing the plan every year.

Not sure if your sales compensation plan will work next quarter?

Designing a sales compensation plan on paper is one thing. Making sure it actually drives the right behavior, fits your unit economics, and doesn’t blow up in Q2 is another.

If you’d like a second set of eyes, our team reviews plans for growing B2B revenue teams all the time – and can quickly flag common risks and missed opportunities.

Sales Compensation Examples & Plan Templates

Every business is different, but patterns repeat. The examples below are simplified to illustrate how different roles can participate in sales incentive compensation. Use them as starting points rather than finished plans.

Example 1 – SaaS Account Executive

• Role focus: New ARR in mid-market accounts.
• OTE: $120,000 (50/50 mix: $60,000 base, $60,000 variable).

• Core metric: New ARR closed.
• Mechanics: 10% commission on new ARR up to quota, 12% beyond quota.
• Accelerators: Higher rate on multi-year or strategic product mix deals.

Example 2 – SDR / BDR

• Role focus: Qualified pipeline creation.
• OTE: $70,000 (70/30 mix).
• Core metrics: Qualified meetings and pipeline value accepted by AEs.
• Mechanics: Fixed amount per accepted opportunity, plus quarterly bonus for hitting pipeline targets.
• Safeguards: Disqualification and quality checks to prevent "empty" meetings.

Example 3 – Account Manager / Customer Success

• Role focus: Renewals, expansion, and NRR.
• OTE: $100,000 (80/20 mix).
• Core metrics: Renewal rate, NRR, and expansion ARR.
• Mechanics: Bonus tied to renewal and NRR thresholds, with additional incentives for upsell and cross-sell.

Example 4 – Small business sales team

• Role focus: High-volume SMB deals.
• Plan: Lower base salary with higher variable, simple flat-rate commission on each deal.
• Mechanics: Tiered accelerators above quota to reward top performers, with optional SPIFs for new product pushes.

Downloadable templates and guides

If you’d like plug-and-play templates, visit our Guides hub for editable examples of AE, SDR, and CS plans.

Download free sales compensation plan templates →

From Spreadsheet Chaos to Sales Compensation Software

Why manual sales compensation breaks at scale

Many teams start with spreadsheets. Over time, the number of roles, plans, and exceptions grows – and so do errors, disputes, and late payouts.

Manual processes make it hard to provide real-time visibility, audit trails, or scenario modelling. Finance and RevOps spend countless hours reconciling data instead of improving plans.

What modern sales compensation software does

Modern platforms automate the mechanics behind sales compensation software and commission plans so you can:

• Design complex rules visually instead of in spreadsheets.
• Connect directly to CRM, billing, and payroll systems.
• Provide real-time dashboards for reps, managers, and finance.
• Run what-if scenarios on plan changes before you roll them out.
• Reduce payout errors and speed up approvals.

How Bentega supports modern sales compensation

Bentega is built for recurring revenue teams that want to move beyond spreadsheets without losing flexibility. You can manage commissions, bonuses, SPIFs, and KPI-based incentives in a single system.

Key capabilities include visual plan design, automated calculations, approval workflows, and rep dashboards that show earnings in real time. Learn more on our Product page or explore role-specific benefits on our Solutions pages.

When to bring in compensation consulting

Sometimes the challenge isn’t just tooling – it’s plan design. If you’re launching a new market, restructuring territories, or experiencing frequent disputes, external expertise can accelerate your redesign.

Bentega’s specialists can help you audit current plans, model alternatives, and roll out changes with clear communication and governance. Learn more on our Sales Compensation Consulting page.

Sales Compensation Checklist (Summary)

Use this quick checklist to pressure test your current plans before the next review cycle.

• Our sales performance compensation is clearly aligned with go-to-market priorities.
• Pay mix and OTE are realistic, competitive, and affordable.
• Each role has no more than two or three primary KPIs.
• Plans are written, accessible, and understood by reps.
• We can explain how incentives support long-term customer value, not just short-term wins.
• Disputes and payout errors are rare – and resolved quickly when they happen.
• We review performance and plan effectiveness at least annually.

If you can’t confidently tick most of these boxes, it may be time to revisit your design and tooling.

Final prompt: compare your current approach against our Incentive Compensation and Sales Commission Structure guides, then decide where to simplify, automate, or redesign.

Review your current sales compensation plan with Bentega – book a quick consult →

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FAQ – Sales Compensation

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Key Takeaways

• sales compensation examples show there is no one-size-fits-all plan – effective designs reflect your roles, motion, and strategy.
• Simple, transparent plans with clear 10 KPIs outperform complex, opaque structures.
• Base salary vs variable pay should reflect risk, control, and market benchmarks for each role.
• Automation reduces errors, speeds payouts, and builds trust across sales and finance.
• Regular review and iteration keep your plans aligned with business goals and market changes.