Sales Commission Plan Template

What is a sales commission plan?

A sales commission plan is the written agreement between an employer and a salesperson about how commission works. Most commission disputes come down to a handful of questions: commission on what, at what rate, earned when, paid when, and what happens when a customer cancels or the salesperson leaves. This template answers each of them.

You choose what commission is calculated on (net revenue, gross margin, or first-year or annual contract value), the rate, and whether it is settled by month, quarter or year. Add an optional quota and a higher rate above quota, tiers or special rules, and an optional recoverable or non-recoverable draw. You decide whether commission is earned when the customer pays, when the sale is invoiced or when the contract is signed; set a clawback window for cancelled, refunded or unpaid sales; and choose whether commission on deals that land after the salesperson leaves is paid for a set number of days. The plan also covers split deals and house accounts, statements and queries, leaves of absence, and notice before the plan is changed. Changes never reduce commission already earned.

When to Use a sales commission plan

• Putting a new salesperson's commission in writing on day one
• Rolling out a new plan for the year or quarter to the whole sales team
• Replacing a commission arrangement agreed by email or on a call
• Adding a draw for a new rep while they build a pipeline
• Setting clear rules on cancellations, refunds and deals that close after someone leaves

What You Fill In

21 blanks, then the name and email of each person who signs: employer, employee.

What the sales commission plan Covers

1. Plan period and scope
2. Commission rate
3. When commission is earned
4. Payment and statements
5. Clawback
6. Leaves of absence
7. Leaving the Company
8. Changes to the Plan
9. General

Using the sales commission plan, step by step

1 Set the scope

Enter the salesperson, their territory or accounts, and the plan period. Leave the end date empty if the plan continues until it is replaced.

2 Define the maths

Choose what commission is calculated on and enter the rate. Pick the period — month, quarter or year — and, if you use one, the quota and the rate above quota. Put tiers, multi-year deal rules or house-account rates in the special rules box.

3 Decide when it is earned and paid

Choose the earning event. Tying commission to customer payment protects cash flow; tying it to signature is simpler for the salesperson. Add a draw if you offer one, and set the clawback window and the number of days the salesperson has to query a statement.

4 Set leaving and change rules, then send

Choose whether commission is paid on sales that become earned for a period after the salesperson leaves, how much notice you give before changing the plan, and the governing law. Send it; the signed plan is filed in Files.

Tips Before You Send It

• Work through a real example with the salesperson before they sign — one closed deal, one cancellation — so the plan reads the way you both expect.
• Keep "earned" and "paid" distinct: many places require commission that has been earned to be paid on time, including after the employee leaves.
• Give a new plan to each salesperson before the period it covers starts.
• If you use a recoverable draw, be clear that an unrecovered balance is not a debt the salesperson must repay from their own money unless the law allows it and they have agreed separately.
• Some places require commission arrangements to be set out in writing and acknowledged by the employee — a plan signed online gives you a dated record either way.

Sales commission plan: frequently asked questions

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This template is a general starting point, not legal advice. Laws differ between countries and states — have a lawyer review the agreement for your situation before you rely on it. Page last reviewed 2026-09-29.