Commission rewards sales. The two most common plans are a single rate and a tiered rate.
Flat rate
Commission = sales × rate. Sales of 50,000 at 5% earn 2,500.
Tiered rate
A lower rate up to a target and a higher rate above it. With 3% up to 30,000 and 6% above, sales of 50,000 earn 30,000 × 3% = 900, plus 20,000 × 6% = 1,200, so 2,100.
The question to ask
When you pass the target, does the higher rate apply only to sales above it, or to all your sales? Most plans use the first method, but some use the second, and the difference can be large. Get the answer in writing.
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