Illustration of two pay plans crossing at 50,000 dollars of monthly sales

Work, pay & shifts

Base Salary Plus Commission vs Commission Only

A job with a base salary and a small commission and one with commission only can pay the same at one level of sales and very differently at others. Finding that level — the break-even — is the quickest way to compare them. This guide works through the comparison and the other things that matter besides the average.

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How each plan pays

Base plus commission pays a fixed amount whatever you sell, plus a smaller rate on sales. Commission only pays a larger rate and nothing fixed. The base buys stability; the higher rate pays off once sales are high enough.

Finding the break-even

Compare $3,000 a month plus 4% with 10% commission only. They pay the same when 3,000 + 0.04 × sales = 0.10 × sales, which is $50,000 a month.

Finding the break-even comparison
Monthly salesBase $3,000 + 4%Commission only, 10%
$20,000$3,800.00$2,000.00
$40,000$4,600.00$4,000.00
$50,000$5,000.00$5,000.00
$60,000$5,400.00$6,000.00
$80,000$6,200.00$8,000.00

How much of your pay is commission

At $60,000 of sales, the base-plus plan pays $2,400 of commission out of $5,400 — about 44% of total pay. Under commission only, it is 100%. The higher that share, the more your income moves with your sales.

Same average, different months

If sales alternate between $20,000 and $80,000, both plans average $5,000 a month. But base plus commission pays $3,800 and $6,200, while commission only pays $2,000 and $8,000. The lean months are the ones to plan for.

What else to compare

  • Quota, and whether commission starts only above it.
  • Draws against commission, and whether they must be repaid.
  • Caps on commission, or higher rates above a target.
  • Benefits and paid time off, which often follow the base.
  • Minimum wage: non-exempt employees on commission only must still earn at least minimum wage for the hours they work; outside salespeople are generally exempt.

Base Plus Commission FAQ

Is base plus commission better than commission only?
It is better below the break-even level of sales and worse above it. Compare at the sales you realistically expect.
How do I compare two commission job offers?
Work out monthly pay under both at low, expected, and high sales, and find the break-even where they are equal.
What is OTE in a sales job?
On-target earnings: base pay plus the commission you would earn at 100% of quota.
What does a 60/40 pay mix mean?
At target, 60% of pay is base and 40% is variable commission or bonus.
Do commission-only jobs have to pay minimum wage?
For non-exempt employees, yes — total pay for the hours worked must reach minimum wage. Outside sales roles are usually exempt from that rule.

Related guides

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