Commission How commission is structured, calculated from won deals, approved, and paid through payroll - including clawback.

Commission links Sales to pay. A won deal produces a commission entry against the person who owns it, which is approved and then paid through a payroll run.

Structures

A commission structure is a named set of rules, scoped to a hub and a currency.

• Commission type - what it is earned on. Deal-based is the live type: commission follows won deals.
• Base percentage - the flat rate, where the structure is not tiered.
• Tiered - whether rates step up with volume.
• Approval required - whether entries need signing off before they can be paid.
• Clawback enabled, with a clawback period in days.
• Active - so a retired structure stops applying without deleting its history.

Each employee is assigned a structure. One structure serves many people, which is what keeps it consistent - and means changing a rate changes it for everyone on that structure.

Tiers

A tiered structure has bands, each with a minimum, a maximum, a percentage and optionally a flat bonus.

Tiers are how "5% up to 50,000, 7% above it, plus a bonus at 100,000" is expressed. Define them without gaps - a sale that falls between two bands has no rate to apply.

What An Entry Records

Each commission entry carries the deal, the sale amount, the percentage applied, the payout amount, the period month and year, the currency, and - where the deal was in another currency - the exchange rate used and the base-currency equivalents.

It also carries the payroll run it was paid in, once it is paid. That link is what lets you answer "which payslip was this on" without reconstructing it.

The Journey Of An Entry

1. Calculated - created from a won deal at the structure's rate.
2. Approved, where the structure requires it, recording who and when.
3. Paid, attached to a payroll run and appearing on the payslip as a commission figure.

Entries not yet paid when someone leaves become part of their final settlement. See Final Settlement.

Clawback

Where enabled, commission can be reversed within the clawback period - typically when a deal is cancelled or a payment is never collected.

A clawback is recorded as its own entry referencing the original, rather than by editing or deleting it. The history stays intact, which matters when someone asks why their commission changed three months later.

Set the period to match your real risk: if customers can cancel within 30 days, a 30-day window is honest; a 12-month window is a retention device and people will read it as one.

Setting Up

1. Decide the rule in plain language first, and write it down. Most commission problems are ambiguity in the rule, not arithmetic.
2. Create the structure, scoped to the hub and currency.
3. Add tiers if it is tiered, with no gaps.
4. Decide approval - required for anything material.
5. Decide clawback, and the period.
6. Assign employees to the structure.
7. Test with one closed deal and check the entry before anyone is paid on it.

Common Questions

Someone's commission looks wrong. Check which structure they are assigned to first, then the tier the sale fell into. Rates are shared, so a wrong rate is usually wrong for a group.

Two people worked the deal. Entries attach to the deal owner. Split arrangements are a policy question - decide how you handle them before it happens, not after.

A deal was cancelled after payment. That is what clawback is for, within the period. Outside it, it is a conversation.

When is commission paid? On the payroll run for its period. It appears as a commission figure on the payslip - see Your Payslip.