Commission-based Pay

Commission-based pay is a compensation structure where employees earn a percentage of the sales or revenue they generate, rather than receiving a fixed salary. This system incentivizes workers, especially in sales roles, to increase their performance since their earnings are directly tied to their success in selling products or services. For example, if a salesperson sells a product worth $1,000 with a 10% commission rate, they would earn $100. This model can motivate employees to work harder and can lead to higher overall earnings if they meet or exceed their sales targets.