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What are the advantages and disadvantages of commission only compensation versus salary only compensation?
Wiki User
∙ 14y ago
Pro's = always know how much $$$ will be coming in each month. Good for budgeting your spending/savings Con's = no matter how many long nights and weekends you work you still get paid the same. Which can actually be a Pro if you can finish up everything early and get away from work.
Wiki User
∙ 15y ago
Wiki User
∙ 14y agoGood question, but really it is based upon what is good for you. With commission only, you are in a position where you are in charge of your income. If you are good in sales, focused, a self-starter and willing to work hard - you will more than likely have better than fair commission checks. The drawback to commission is the fact that you can get chargebacks. If someone fails to follow through with their end of the contract, stops making payments or what-have-you; as a person who's pay is based on commission only, you MUST UNDERSTAND that charge backs are real! Also, consider the fact that YOU are responsible for paying in your own taxes!
Being compensated by salary gives you the comfort of knowing how much money you are to receive on designated pay periods. The downside is that you have to wait for raises and you are not in control of how much you get paid. Thus, resulting in many people who get frustrated over time with raises less than 2%!
Really there are pros and cons to both, but it is best to assess your personal finances and your goals to determine which form of compensation is best for you.
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Types of commission in the business?
Types of Commissions:1. Base plus commissions- It involves receiving a pre-determined base salary plus some type of commission on the sales you actually make.2. Draw against commission- type of compensation plan is totally commission based.3. Residual commissions- Earning residual commissions is a salesperson's dream, because as long as their accounts are generating revenue for the employer, the salesperson continues to receive a commission.4. Salary plus bonus- this is the method of compensation you agree upon, you'll receive a pre-determined salary each pay period that is not impacted by your performance.5. Salary plus commission- This is the same as a "base plus commission" compensation structure.6. Straight commission- type of compensation can be a bit risky, since you only get paid based on how much you sell.7. Straight salary - you'll earn a straight salary that is in no way impacted positively or negatively by your sales performance.8. Variable commission- This type of commission structure is similar to a straight commission, however, the commission rate you're paid goes up or down based on pre-determined circumstances.
What is straight salary?
Salary Plan a salesforce compensation method in which salespeople are paid a straight salary; a salary plan approach provides security and stability but may not provide the incentive associated with commission payments.
How does an IT recruiter get paid - is it by commission, fee, or salary?
If they successfully place a candidate, the most common compensation method is paying a percentage of the candidate's first year's salary to the recruiting agency.
What is the commission rate for service sales?
The commission rate for any product or service is based on the annual services revenue and total sales compensation less salary. If annual services revenue is $12M and the total sales compensation is $240,000 including a $120,000 salary, then the services commission rate is ($240K - $120K)/$12M = 1%. Depending on the type of services and total comp, commission rates may range from 0.25% to 4.0% for services. JMC
The presidents salary is called?
compensation
What is a compensation package?
Sum of direct benefits (such as salary, allowances, bonus, commission) and indirect benefits (such as insurance, pension plans, vacations) that an employee receives from an employer. [businessdictionary.com]
What is the presidents annual compensation and salary?
Salary of 400k.
What does total annual compensation include?
Total annual compensation would include base salary, any commission you would have made, any bonuses you would have received, and your health benefits package, i.e. medical and dental plan value.
What is the advantages and disadvantages of being a marine engineer?
no disad. it is good with high salary. only one problem THIS JOB SUCKS5
What are the three sales compensation methods?
The three sales compensation methods are straight commision, straight salary, and salary plus commision.Commission Salespeople- Paid only when they sell something.Salaried Salespeople- Paid a set amount regardless of how much they sell.Salary Plus Commision Salespeople- Have a set salary, but their commission rate is lower than those who are pain only commission.Hope this helps. ^^ - Noctali
Is contingent compensation more likely to result in a determination that compensation is unreasonable than a compensation package that is all or primarily a fixed salary?
yes, contingent compensation is more likely to result in a determination that compensation is unreasonable than a compensation package that is a fixed salary.
What is greater commission or salary?
It depends on the way the commission is worked out. It could very well work out that the commission is very much more than that person's salary. Also, a person could work on a "commission only" with NO salary.
