What is Commission Pay?

Commission pay is a variable form of compensation where an employee gets paid based on the amount of work they achieve or a percentage of sales they make. Commission pay is most often used for sales positions as incentive to increase sales volume and transaction amounts.

In most cases, an employee will need to be paid a gross wage or salary in addition to their commission pay. In a few very specific exceptions, an employee’s pay may consist entirely of commission payments based on their performance or the value of their total sales each pay period.