What is Pay Mix?

Pay mix refers to the ratio of fixed pay to variable pay in an employee’s compensation. A pay mix ratio is typically used in sales departments to motivate employees to reach or exceed their targets.

The usual ratios are 60:40, 70:30, and 75:25. A 60:40 pay mix means 60% of the salary is fixed pay, and 40% is variable pay. The greater variance in the ratio, the greater the variable pay. So, for example, 60:40 means more of an employee’s pay is at risk compared to 80:20.

It’s important to choose the appropriate mix for your workplace to ensure employees are motivated.