Commish › How do sales accelerators work?
How do sales accelerators work?
Accelerators pay a higher commission rate once you pass a threshold, usually 100% of quota, so each dollar past quota earns more than each dollar before it. At 10% base and 15% above a $1,000,000 quota, a $50,000 deal pays $5,000 before quota and $7,500 after.
The three parts of an accelerator
- Threshold: where the higher rate starts, usually 100% of quota, sometimes with more tiers at 125% or 150%.
- Rate or multiplier: the higher rate itself, often written as a multiple of the base rate, such as 1.5x.
- Scope and timing: whether the higher rate applies only above the threshold or to all sales, and whether it's paid as you go or after year end.
Marginal vs retroactive
Most accelerators are marginal: only dollars above the threshold get the higher rate. Retroactive accelerators re-rate all sales once you cross. On $1,200,000 against $1,000,000 at 10%/15%, marginal pays $130,000 and retroactive pays $180,000.
When an accelerator is really a decelerator
Bonus plans often state a commission rate for revenue above quota without stating the rate below it. Work it out as target bonus ÷ quota. A $120,000 target on a $600,000 quota pays 20¢ per dollar below quota. If the over-quota rate is 8%, each dollar past quota pays 8¢, so overperformance pays less, not more.
Formula
Below threshold: Sales × Base rate Above threshold: (Sales − Threshold) × Accelerated rate Base rate on a bonus plan = Target bonus ÷ Quota
Example
Quota $1,000,000. Base rate 10%. Accelerator 1.5x (15%) above 100%.
At $1,200,000 you earn $100,000 + $30,000 = $130,000. The last $200,000 earned 15¢ per dollar instead of 10¢.
Try it with your numbers
Common questions
Why do companies use accelerators?
To reward overperformance and keep top reps selling after they hit quota. Without one, a rep at 100% has less reason to close another deal before the period ends.
Can accelerators be capped?
Yes. Some plans cap total payout, stop accelerating past a certain attainment, or let management review unusually large deals.
Are accelerators paid immediately?
Some plans pay them as you earn them. Others calculate them only at year end on full-year results, so a strong first half doesn't pay extra if you finish the year below quota.
How do I know if my accelerator is worth chasing?
Compare the rate above quota with your effective rate below it. If the rate above is higher, every deal past quota is worth more. If it's lower, you're on a decelerator.
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