Tiered commission by productivity uses the productivity rate, which is calculated by taking the total revenue earned and dividing it by productive clocked hours.
- Tiered commission by productivity can be calculated based on All Revenue Earned or Amount Above Earned.
- Amount Above Tier - This setting applies an incremental commission for each productivity threshold achieved. Commission will be calculated as (productivity - tier threshold) x tier % x clocked hours.
- All Revenue Earned - This setting applies only one tier, the one which matches the overall productivity. Commission will be calculated as productivity x tier % x clocked hours.
- Tiers support both percentage commissions as well as fixed commission amount
- You can set the base rate that the commission is paid on for the first tier and then add as many tiers as you like. This can be configured on each staff member's profile once compensation tracking is enabled.
We will now look at how the commission is calculated for both options.
Setup:
Pay Cycle - Weekly
Staff - Kelly Mae
Clocked Hours - 5
Service Revenue - $380
Service Productivity - $380 / 5 = $76
Product Revenue - $250
Product Productivity - $250 / 5 = $50
Commission Tiers
Above $0 per pay cycle then pay 10%
Above $30 per pay cycle then pay 20%
Above $45 per pay cycle then pay 40%
Tiered Commission by Productivity: Amount Above Earned
If Tiered Commission by Productivity: Amount Above Earned is selected, the total compensation for this staff member will be:
Service commission = ($76 - $45) x 0.4 x 5
($31 x 0.4) x 5
$12.4 x 5
$62
Product commission = ($50 - $45) x 0.4 x 5
($5 x 0.4) x 5
$2 x 5
$10
$30.4 x 5
$152
Product commission = ($50 x 0.4) x 5
$20 x 5
$100
*Please note that if a discount is added to a ticket, the commission will be based on the post / pre discount settings.