Should you have a cap on sales commissions?


I have a small sales team that gets a commission for each new client they sign on for a B2B SaaS app.

Should I cap their commissions at some point? What are some strategies on how to structure sales commissions?

Sales Strategy Commission

asked Apr 18 '14 at 21:40
Patricia Brock
12 points

2 Answers


Based on advice I heard from others - no. Sales are sales to you, so why limit someone's performance? Just be smart and don't structure commission based on leads (people will learn to game it) and only on actual sales, or at least limit leads-based compensation. Also, consider cancellations/churn as well to encourage healthy sales, perhaps pay bonuses for % of customers who stay on for X months or similar.

answered Apr 19 '14 at 00:03
2,835 points


You shouldn't cap commissions if you're a startup! That's the key incentive for sales people for joining startups. Startups are risky by nature. The main appeal for sales people to join startups is the allure of generating a ton in sales commissions based on their ability to sell.

That said, most mid to large sized businesses do have caps. But that's something to figure out when your business reaches that level.

answered Apr 19 '14 at 08:40
Bruce Schwartz
767 points

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Sales Strategy Commission