Sales commissions are a key part of how many companies compensate and motivate their sales teams, but deciding what to pay isn’t always straightforward. Companies need to consider both the commission rate and the structure of the plan to make sure compensation aligns with the role and the goals of the business.
Understanding what a standard sales commission looks like can provide a useful starting point. This guide covers common commission rates and structures, along with the factors companies should consider when building or evaluating a sales compensation plan.
What Is a Standard Sales Commission?
A standard sales commission is the amount or percentage of a sale that a salesperson earns as variable compensation for generating revenue. While the term suggests there is a single standard rate, commission rates can vary considerably depending on the company, industry, sales role, and type of product or service being sold.
Sales commissions are often calculated as a percentage of revenue or gross profit, although some companies use flat-rate payouts or other performance-based formulas. For example, a salesperson might earn 8% of the revenue they generate, while another company may pay a fixed amount for each new customer or product sold.
What qualifies as a standard sales commission also depends on the broader commission pay structure. A role with a higher base salary may have a smaller portion of compensation tied to commission, while a commission-heavy or commission-only role may offer higher earning potential for each sale. Because of these differences, companies generally use market benchmarks as a reference point rather than treating a particular commission percentage as a universal standard.
Recommended reading: The Top Sales Compensation Consulting Firms in the United States.
What Is a Standard Sales Commission Rate?
There is no single standard sales commission rate that applies across every company or sales role. Commission rates vary based on factors like industry, deal size, profit margins, sales cycle, and the amount of a salesperson’s total compensation that comes from variable pay.
For many sales roles, commission rates fall somewhere between 5% and 20% of the value of a sale, although rates can fall outside this range depending on how the compensation plan is structured. A company selling high-value products with relatively low margins, for example, may offer a lower percentage than a business with higher margins or smaller deal sizes. Commission-only positions may also carry higher rates because the salesperson receives little or no guaranteed base salary.
The percentage itself also doesn’t tell you how competitive or effective a commission plan is. A 10% commission on revenue produces a very different payout than 10% on gross profit, and a flat 10% rate works differently from a plan that increases commission rates as a rep reaches or exceeds quota. Base salary, quota, on-target earnings (OTE), accelerators, thresholds, and other plan components all affect how much a salesperson can ultimately earn.
For that reason, standard sales commission rates are most useful as benchmarks rather than rules. Companies can compare their rates with similar roles and industries, but the final rate should reflect their own sales economics and the earnings opportunity they want to provide.
Recommended reading: Is a Commission-Only Job Right for You?
How to Calculate Standard Sales Commission Rates
Sales commissions are typically calculated by multiplying the amount of commissionable sales by the applicable commission rate. For example, if a rep closes a $50,000 sale and earns a 10% commission, their commission would be $5,000.
The calculation can become more complex depending on the commission structure. Companies may calculate commissions based on revenue, gross profit, units sold, or another performance measure. Plans may also use different rates based on quota attainment, sales volume, or other thresholds, so the rate applied to each sale can change as a rep progresses through the compensation period.
Standard Sales Commission Rates by Role
Standard sales commission rates can vary considerably by role because different members of a sales team have different levels of influence over revenue. Roles directly responsible for closing new business generally have more compensation tied to sales performance, while roles focused on prospecting, customer management, or team leadership often use a larger base salary and different incentive measures.
Because of these differences, commission percentage alone isn’t always the best way to compare compensation across sales roles. Pay mix, which refers to the percentage of on-target earnings coming from base salary versus variable compensation, provides another useful benchmark.
Account Executives
Account executives typically have one of the strongest connections between individual sales performance and variable compensation. According to The Bridge Group’s 2026 AE Models, Motions & Metrics research, the median B2B account executive earns $200,000 in on-target earnings against a median annual quota of $960,000. The study included 158 B2B companies.
Earlier research from The Bridge Group found a median 53:47 base-to-variable pay mix for SaaS AEs, meaning nearly half of target compensation was tied to variable earnings. Commission rates can then be established based on the amount of variable compensation available at quota and the revenue or ACV the rep is expected to generate.
Sales Development Representatives
SDRs and BDRs are less likely to earn a standard percentage of the revenue from each deal because their primary responsibility is generating qualified pipeline rather than closing business. Their variable compensation may instead be tied to qualified meetings, opportunities, pipeline, or a combination of performance measures.
The Bridge Group’s 2025 Sales Development benchmark study, based on 351 B2B companies, found a median SDR OTE of $80,000, consisting of a $55,000 base salary and $25,000 in variable compensation. That represents approximately a 68:32 base-to-variable pay mix.
Account Managers and Existing-Customer Sellers
Account managers and other sellers responsible for existing customers often have more guaranteed compensation than new-business sellers. Their incentives may be tied to renewals, expansion revenue, retention, or other customer revenue goals rather than a single commission rate on every sale.
WorldatWork’s Sales Compensation Programs & Practices study found that field sellers focused on current customers had an average target pay mix of 59% base salary and 41% variable compensation. By comparison, field new-account sellers had a 54:46 mix.
Sales Managers
Sales managers typically have a greater percentage of compensation guaranteed through base salary because their performance depends on the results of an entire team rather than the deals they personally close. Variable compensation can be tied to team revenue, quota attainment, or other broader sales objectives.
WorldatWork found that field first-line sales managers had an average target pay mix of 66% base salary and 34% variable compensation. Inside first-line sales managers had the same 66:34 split.
Ultimately, role-based benchmarks are most useful for understanding how much sales compensation should be tied to performance and which results an employee can reasonably influence. Companies can then determine the appropriate commission rate or incentive formula based on the role’s target earnings, quota, responsibilities, and contribution to revenue.
Recommended reading: The Definitive Guide to the Commission-Only Sales Position.
Standard Sales Commission Rates by Industry
Sales commission rates vary significantly by industry because companies have different margins, deal sizes, sales cycles, and revenue models. The amount a commission rate is applied to also matters. A percentage of annual contract value in SaaS, for example, isn’t directly comparable to a percentage of premium in insurance or a percentage of the sale price in real estate.
For that reason, industry commission benchmarks are best used as reference points rather than prescribed rates.
SaaS and Software
SaaS companies commonly calculate commissions using annual contract value (ACV), annual recurring revenue (ARR), or another measure of new business booked by a salesperson.
Industry benchmark data generally places commissions for SaaS account executives around 10% of ACV at quota, although rates vary based on deal size and the economics of the sales model. The Bridge Group’s AE benchmark research provides additional data on AE quotas, on-target earnings, and sales productivity that companies can use when determining an appropriate commission rate.
Manufacturing
Manufacturing commission rates can vary depending on whether a salesperson is an employee or an independent manufacturer’s representative, the type of customer, and whether commissions are calculated on revenue or gross profit.
The Manufacturers’ Agents National Association surveyed 402 manufacturers’ representatives and found average commission rates of 6% for sales to original equipment manufacturers (OEMs), 7% for sales to distributors, and 11% for sales to end users. Reported ranges extended from 5% to 14% depending on customer type.
Insurance
Insurance commissions are generally calculated as a percentage of the premium associated with a policy, but rates vary considerably by product and between new business and renewals.
InSifter’s 2026 insurance commission benchmark data, based on 180 agent-reported rates across 70 carriers, found new-business commissions of approximately 10% to 15% for personal lines and 10% to 20% for commercial lines. Renewal commissions generally ran two to four percentage points below new-business rates.
Real Estate
Real estate commissions are generally calculated as a percentage of a property’s sale price rather than against a quota or recurring revenue target. The total commission associated with a transaction may also be divided between the brokerages and agents representing the buyer and seller.
Because real estate commissions are negotiable and can vary by market, property, brokerage, and transaction, a single percentage shouldn’t be treated as a required industry rate. Current industry benchmark data generally places total residential commissions around 5% to 6% of the sale price, before accounting for how that amount is divided among the parties involved.
Ultimately, industry benchmarks provide context for what other companies may be paying, but they don’t determine what an individual company should pay. The appropriate rate depends on what the commission is calculated against, the margins associated with the sale, expected sales volume, the role’s pay mix, and the company’s broader compensation strategy.
Recommended reading: Do Sales Engineers Make Commission?
Final Thoughts
A commission plan can also tell a company a lot about the health of its sales organization. When reps consistently struggle to understand their earnings, managers regularly make exceptions, or payouts don’t match the outcomes the business expected, the problem may extend beyond the commission rate itself. Those patterns can point to unclear goals, unrealistic quotas, inconsistent sales processes, or gaps in how performance is measured.
Companies should treat commission data as another source of information about how the sales organization is operating. Looking at attainment, payouts, exceptions, and earnings over time can help leaders identify where expectations and actual performance aren’t lining up and make more informed decisions about the broader sales strategy.
