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OTE-based commission plan template
The rate comes from the rep's on-target earnings.
What it is
The commission rate comes from the rep's on-target earnings: annual variable pay divided by annual quota. A rep who closes exactly the quota earns exactly the variable pay.
When to use it
You hire reps on a fixed split between base and variable pay, and want the plan to pay out the full variable at 100% attainment.
When not to
Quotas are still guesses. If a quota is set too low, the rate comes out too high and every deal overpays.
How it's calculated
rate = annual variable pay ÷ annual quota
commission = deal amount × rate
A worked example
A rep with ₹6,00,000 of variable pay a year and a quota of ₹1,20,00,000 a year.
| Item | Amount |
|---|---|
| Annual variable pay | ₹6,00,000 |
| Annual quota | ₹1,20,00,000 |
| Rate (₹6,00,000 ÷ ₹1,20,00,000) | 5% |
| Commission on a ₹4,00,000 deal | ₹20,000 |
A rep who closes exactly the quota earns exactly the variable pay: ₹1,20,00,000 × 5% = ₹6,00,000.
Common mistakes
- Mixing periods, such as a quarterly quota with annual variable pay. Use the same period for both.
- Keeping the old rate after a quota changes mid-year. A new quota means a new rate, from a start date.
- Forgetting reps who join mid-year. Pro-rate both the quota and the variable pay, so the rate stays the same.
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Run this plan in Stagerev
Stagerev runs this plan every month on your HubSpot deals and Stripe payments, and shows the deal, rule and rate behind every line.
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