Sales Compensation Plan Template

Design a sales compensation plan with quota, on-target earnings, accelerators, and cost controls. Free comparison tool and €49 Excel toolkit.

Start with OTE and pay mix

On-target earnings (OTE) combine base salary and target variable compensation. A €100,000 OTE at a 60/40 mix means €60,000 base salary and €40,000 variable pay at 100% attainment. OTE is a target, not a guarantee of earnings.

Define the quota and payout curve

Set the quota period and metric before choosing rates. If target variable pay is €40,000 and annual quota is €1 million, the implied rate at quota is 4% of eligible sales, assuming a linear uncapped plan. Decide whether payout starts from the first euro or after a threshold.

Model accelerators and caps

An accelerator rewards overachievement, but it also increases the cost of exceptional sales performance. Model outcomes at 50%, 100%, 125%, 150%, and 200% attainment. A cap limits payouts but can weaken incentives once reached.

Document rules and exceptions

A practical plan specifies eligible revenue, crediting rules, split deals, renewals, cancellations, timing, clawbacks, and the process for resolving disputes. Have the appropriate legal and HR teams review the final terms.

Compare your sales compensation plan

Use the free CFO Help calculator to compare plan economics, or get the €49 Excel toolkit for detailed forecasting and analysis.