What is Commission?
Commission in B2B sales development is the variable portion of a salesperson’s or SDR’s compensation, paid when they hit agreed-upon performance metrics such as qualified meetings booked, pipeline generated, or revenue closed. It sits on top of a fixed base salary and is designed to align day-to-day prospecting and qualification work with the company’s growth and revenue goals.
Understanding Commission in B2B Sales
Historically, commissions were calculated as a straightforward percentage of revenue-e.g., an AE might earn a set percentage of every deal they closed. As sales organizations specialized and introduced SDR teams focused on prospecting rather than closing, commission structures evolved. SDRs now typically earn commission on pipeline milestones they directly influence: completed meetings with ICP accounts, accepted SQLs, or opportunities that progress to a certain stage. This ensures the comp plan rewards both activity and quality, not just volume.
Modern benchmarks show how central commission is to sales development earnings. In the United States, SDRs commonly earn a base salary of roughly $50,000–$60,000 with on-target earnings (OTE) around $75,000–$85,000 once commissions are included, and the variable portion often falls in the $20,000–$30,000 range.qobra.co Many SaaS and B2B organizations use a 60-70% base / 30-40% variable mix for SDRs so reps have financial stability plus meaningful upside when they meet quota.martal.ca
Commission also plays a key role in how realistic OTEs feel to reps. Recent data shows median SDR OTE around $85,000, but only about 55% of SDRs actually hit full quota, meaning many do not realize their full commission potential.salesso.com Other studies put average SDR quota attainment in the low-to-mid 60% range, highlighting how aggressive targets or misaligned plans can undermine the motivational power of commission.everstage.com When reps consistently miss quota despite strong effort, commissions can start to feel like “phantom pay,” leading to burnout and churn.
Today’s high-performing B2B sales organizations use commission as a strategic lever-not just a payout mechanism. They tie SDR commission to a small set of controllable KPIs, apply accelerators for overperformance, and introduce SPIFFs for short-term focus, all while revisiting plan design annually (or even quarterly) based on data. Commission management software, CRM reporting, and outsourced SDR partners make it easier to track results and pay accurately, so commission genuinely drives behavior that builds healthy pipeline and predictable revenue.
Key Benefits
Aligns SDR Effort With Revenue Outcomes
Commission connects daily activities like cold calls, emails, and follow-ups directly to meetings booked and pipeline created. When SDRs see a clear financial payoff for generating high-quality opportunities, they naturally prioritize accounts and activities that drive revenue instead of just staying busy.
Attracts and Retains High-Performing Talent
Competitive commission plans make B2B sales development roles more attractive to ambitious candidates who want upside beyond a fixed salary. Clear earning potential and accelerators for overperformance help you keep top SDRs longer and create a strong bench of future AEs and sales leaders.
Drives Focus on Ideal Customer Profiles and Quality
When commission is tied to qualified meetings or opportunities accepted by AEs, SDRs are incentivized to research accounts, personalize outreach, and avoid low-fit prospects. This improves conversion rates down the funnel and reduces wasted AE time on poor-quality leads.
Supports Forecasting and Performance Management
Structured commission plans with clear quotas and OTEs help leadership set realistic pipeline targets by role, territory, and channel. Over time, commission payout patterns reveal which segments, cadences, and reps are most effective, enabling better resourcing and coaching decisions.
Enables Scalable, Data-Driven Growth
Standardized commission models across SDR pods make it easier to scale outbound teams, compare performance, and run experiments. As you add or outsource SDR capacity, consistent commission logic ensures everyone is working toward the same revenue milestones.
Common Challenges
Overly Complex Commission Structures
Plans with too many metrics, tiers, and exceptions confuse SDRs and make it hard for them to predict earnings. Complexity also creates admin overhead and increases the risk of payout errors, which can damage trust between reps and leadership.
Misaligned Incentives on Quantity vs. Quality
If commission is based solely on meetings booked or raw activity, SDRs may chase unqualified prospects just to hit numbers. This floods AEs with low-quality calls and demos, lowers close rates, and ultimately erodes revenue and morale.
Unrealistic Quotas and 'Phantom' OTE
When quotas are set too high relative to territory, product maturity, or marketing support, many SDRs never reach full OTE. Over time, reps stop believing in the plan, turnover spikes, and hiring becomes harder as word spreads about unachievable earnings.
Inconsistent or Late Commission Payments
Manual spreadsheets, unclear rules, and poor CRM hygiene can lead to underpayments, disputes, and delays. If SDRs have to chase down their own commission or constantly question calculations, their focus shifts away from prospecting and toward internal firefighting.
Disconnect Between SDR and AE Compensation
When SDR commission is not coordinated with AE commission-such as rewarding meetings that never convert-teams can work at cross purposes. Misalignment breeds friction between SDRs and AEs and makes it harder to diagnose what's really driving or blocking revenue.
Key Statistics
Best Practices
Tie Commission to a Few Controllable KPIs
Build SDR commission around 1-3 metrics they can directly influence, such as completed qualified meetings, accepted SQLs, or pipeline dollars sourced. Avoid tying too much pay to lagging metrics like closed revenue that depend heavily on AE performance and long sales cycles.
Use Market Benchmarks to Set OTE and Mix
Benchmark your SDR base salary, OTE, and base/variable split against current market data so your offers stay competitive. For outbound SDRs, a 60-70% base and 30-40% variable mix is common, with OTE aligned to realistic quota expectations in your segment and geography.
Reward Both Volume and Conversion Quality
Design commission formulas that balance activity and results-for example, paying per completed meeting plus bonuses for opportunities that progress to later stages. This pushes SDRs to book more meetings while still qualifying rigorously so AEs see real value from each handoff.
Keep the Plan Simple and Transparent
SDRs should be able to calculate their expected commission on a napkin. Document the plan clearly, including examples and edge cases, and walk each rep through it during onboarding. Revisit language after one quarter to fix any recurring confusion or loopholes.
Automate Tracking and Payouts
Integrate your CRM with a commission management or revenue operations tool so meetings, SQLs, and deals flow into payout calculations automatically. Automated workflows reduce disputes, free up sales ops time, and give SDRs real-time visibility into where they stand against targets.
Review and Adjust Commission Annually
At least once a year, analyze attainment, turnover, and pipeline quality to see whether your plan is driving the right behavior. Use that data to fine-tune quotas, metrics, and accelerators rather than making ad hoc mid-year changes that confuse the team.
Expert Tips
Anchor SDR Commission to Accepted Opportunities
Whenever possible, base a significant portion of SDR commission on opportunities accepted by AEs or reaching a defined stage, not just meetings set. This encourages deeper qualification, better discovery, and stronger collaboration between SDRs and closers.
Use Tiered Accelerators for Overperformance
Introduce higher payout rates once SDRs exceed 100% of quota-for example, paying 1.5x commission on meetings or pipeline above target. Accelerators keep high performers engaged throughout the quarter and can dramatically increase sourced revenue without raising fixed costs.
Separate New Logo and Expansion Incentives
If SDRs work multiple motions (e.g., new business and expansion), create distinct commission rules and quotas for each. This avoids over-indexing on easier expansion work and keeps enough focus on net-new pipeline needed for long-term growth.
Publish a Live Commission Dashboard
Give SDRs a real-time dashboard showing quota progress, booked commission, and scenario projections (e.g., what happens if they book five more meetings). Visibility reduces anxiety about pay, cuts down on compensation questions, and nudges reps to close the gap to target.
Align Outsourced SDR Partners With Your Commission Logic
When working with outsourced SDR providers, anchor contracts to the same outcomes your internal team is paid on-qualified meetings, accepted SQLs, or pipeline dollars. This keeps incentives consistent across teams and makes performance comparisons fair and actionable.
Related Tools & Resources
Salesforce Sales Cloud
Leading CRM platform that tracks activities, opportunities, and revenue so commission calculations can be tied directly to accurate sales data.
HubSpot Sales Hub
CRM and sales engagement platform that logs calls, emails, and meetings, enabling clean SDR performance data for commission payouts.
CaptivateIQ
Commission management platform that automates complex sales compensation plans, calculates payouts, and gives reps real-time visibility into earnings.
Spiff
Incentive compensation management tool that connects to your CRM to automate commission calculations and provide dashboards for SDRs and AEs.
QuotaPath
Sales compensation planning and tracking platform that models commission plans, forecasts earnings, and helps align quotas with revenue goals.
Xactly Incent
Enterprise-grade incentive compensation solution that manages large, complex commission plans across SDR, AE, and channel teams.
Partner with SalesHive for Commission
Because SalesHive owns the cold calling, email outreach, and list building motions, clients gain a steady stream of qualified meetings without worrying about individual SDR comp plans, clawbacks, or disputes. SalesHive’s US-based and Philippines-based teams operate on clear, meeting- and pipeline-centric compensation models, supported by AI-powered personalization tools like eMod. This structure ensures that every outreach touchpoint is aligned with the client’s ICP and revenue goals, while SalesHive’s internal commission systems keep reps motivated to deliver consistent sales development results.
For organizations that still run internal SDRs, SalesHive can complement your existing commission plan by filling pipeline gaps or testing new segments and messaging. The performance data from SalesHive’s campaigns gives revenue leaders an additional signal when recalibrating quotas, OTE, and commission structures across the broader sales organization.
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Frequently Asked Questions
What is commission in B2B sales development?
Commission is the variable, performance-based component of an SDR's or salesperson's pay, earned by hitting metrics such as qualified meetings booked, SQLs generated, or revenue closed. It's designed to align the rep's day-to-day outbound and follow-up activities with the company's pipeline and revenue targets.
How is commission typically structured for SDRs?
Most SDRs receive a base salary plus commission, with base making up about 60-70% of their on-target earnings and 30-40% tied to performance. Common models pay per qualified meeting, per accepted SQL, or based on pipeline dollars created, sometimes with bonuses or accelerators for exceeding quota.
What's the difference between base salary, commission, and OTE?
Base salary is the fixed amount an SDR earns regardless of performance. Commission is variable pay triggered by meeting specific goals. On-target earnings (OTE) is the total expected annual pay-base plus full commission-if the rep hits 100% of quota. Many SDRs earn less than OTE when attainment falls short.
How often should sales commission be paid?
In B2B sales development, commission is commonly paid monthly or quarterly, tied to closed reporting periods and verified performance data from the CRM. Shorter payout cycles, such as monthly, help SDRs see a faster link between effort and earnings, which tends to be more motivating.
Are commission-only SDR roles a good idea?
Pure commission SDR roles are rare in modern B2B sales because they create income instability, higher turnover, and a tendency to chase any lead that might convert. Most successful organizations use a mix of base and commission so SDRs can cover living costs while still having meaningful upside for strong performance.
How should we adjust commission if deals churn or don't close?
For SDRs, it's best to focus commission on milestones they control-completed qualified meetings and accepted opportunities-while using quality checks or clawbacks only in extreme cases. For AEs, many firms include specific rules for churn within a set period or heavy discounting so commission aligns with long-term revenue, not just bookings.
