SDR/BDR (Sales/Business Development Representative)
4–8% on pipeline
70/30 base/variable
Sales Manager
2–4% on team
60/40 base/variable
CSM (Customer Success Manager) / Account Manager
5–10% on expansion
70/30 base/variable
Accelerators
Most plans include accelerators above 100% OTE — the commission rate increases for revenue above quota. This rewards overperformance and retains top reps.
OTE (On-Target Earnings) is the total annual compensation a sales rep earns at exactly 100% quota attainment, combining base salary and variable commission. It is the benchmark for sales comp plan design.
On-Target Earnings (OTE) defines total compensation at 100% quota. It's the number recruiters quote and reps target.
OTE = Base Salary + Commission at 100% Quota
OTE Split Ratios
The proportion of base to variable pay in the OTE:
Role
Typical Split
Rationale
SDR / BDR
70/30
Focuses on activity, not closed revenue
Account Executive
50/50
Balanced incentive for closing
Enterprise AE
60/40
Longer cycles; more base to cover gaps
Sales Manager
60/40
Rewards team performance
Accelerators
Most well-designed comp plans include accelerators above 100% OTE — higher commission rates for revenue above quota. Common structure:
- 0–50%: 50% of standard rate
- 50–100%: 100% of standard rate
- 100–125%: 150% of standard rate
- 125%+: 200% of standard rate
This design rewards overachievers disproportionately and retains top performers.
Why OTE Matters
A rep knowing their OTE can calculate the revenue needed to achieve any income target. Use the commission calculator to model different quota attainment scenarios before accepting a new role.
A well-designed sales commission plan aligns rep incentives with company revenue goals. Key components include OTE, quota design, payment timing, accelerators, and clawback provisions.
A commission plan that reps understand and trust is one of the highest-leverage tools for revenue growth. A plan that confuses or frustrates reps creates churn.
The 5 Core Components
1. OTE and Split — Define total earnings at quota and the base/variable split. Most SaaS AE plans target 50/50 for mid-market and 60/40 for enterprise.
2. Quota — Annual quota should be 4–7× OTE for the business to maintain healthy unit economics. A $150k OTE rep needs a $600k–$1M ARR quota.
3. Payment Timing — Pay on booking (when contract is signed), on invoice, or on cash collection. Booking-based plans are simpler; cash-based plans protect against bad deals.
4. Accelerators — Tiered commission rates above 100% quota. Required to attract and retain top performers.
5. Clawbacks — Commission is returned if a customer churns within 90–180 days. Protects against sandbagging and misaligned incentives.
Common Mistakes
Cap on earnings: Caps demotivate high performers — the best reps stop pushing once they hit the cap. Accelerators are better.
Complex plan mechanics: If a rep can't calculate their own commission in their head, the plan is too complex.
Frequent plan changes: Changing plan structure mid-year erodes trust. Make changes at the start of fiscal year only.
How accelerator tiers work in sales commission plans, why they exist, and how to model total compensation at different attainment levels.
An accelerator is a higher commission rate that kicks in once a rep exceeds 100% of
quota — it's the mechanism that rewards overperformance instead of capping upside once
the base target is hit.
A typical accelerator structure
Attainment
Commission rate
0–100% of quota
Base rate (e.g., 10%)
100–150% of quota
1.5× base rate (15%)
150%+ of quota
2× base rate (20%)
A rep who closes exactly at quota earns the base rate on all revenue. A rep who closes
at 160% of quota earns the base rate up to 100%, the accelerated rate on the 100–150%
band, and the top rate on everything above 150% — each band is calculated separately,
not applied retroactively to the whole number.
Why companies use accelerators instead of a flat rate
A flat commission rate creates a natural ceiling on ambition — once a rep hits quota,
the marginal incentive to keep pushing drops sharply if there's another quota reset just
around the corner. Accelerators keep the incentive to close "just one more deal" alive
all the way through the period, which is exactly the behavior that drives outsized
quarters.
The flip side: decelerators
Some plans include the opposite — a reduced rate below a minimum attainment threshold
(e.g., under 50% of quota), intended to discourage reps from "sandbagging" deals into a
future period once they know they'll miss the current one. Decelerators are less common
than accelerators and more controversial, since they can also punish reps for
circumstances outside their control.
Modeling total compensation with accelerators
To estimate full-year earnings, don't just multiply expected attainment by the base rate
— calculate commission band by band using the attainment percentage, since a rep
consistently closing at 120% earns meaningfully more than 1.2× the base-rate commission
once accelerators are factored in.
Frequently asked questions
Do accelerators apply per deal or per period?
Almost always per period (monthly, quarterly, or annual) based on cumulative attainment
— not per individual deal.
Are accelerators standard for SDRs as well as AEs?
Less common for SDRs, since their comp is usually tied to pipeline generated rather than
closed revenue, but growing in popularity as companies look to reward top-performing SDRs
similarly to AEs.
Use the Commission Calculator to model your total
compensation and OTE attainment at a given revenue level.