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Commission Expense RecomputeBase Rate and Accelerator Above Quota

What do these figures come to once the work is shown?

Recompute commission on sales at a base rate up to quota and an accelerator rate above it, and compare with the recorded commission.

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  • Nothing stored or sent
  • Free, no sign-up
Your figures
Example figuresIllustrative only. Type over them with your own.
Break (recorded less recomputed)
$500
Recorded commission less the recompute
Commission at base rate
$60,000
Commission at accelerator rate
$21,000
Drawn to one scale
Commission at base rate$60,000
Commission at accelerator rate$21,000
Recomputed commission$81,000
Recorded amount$81,500
Break (recorded less recomputed)$500
All results
MeasureResult
Commission at base rate$60,000
Commission at accelerator rate$21,000
Recomputed commission$81,000
Recorded amount$81,500
Break (recorded less recomputed)
Recorded is higher
$500
Effective commission rate4.38%
How this was worked out
Work shownrecomputed as you type
Base = min(sales, quota) x base rate
Accelerator = max(0, sales - quota) x accelerator rate
Recomputed = base + accelerator

Illustrative arithmetic on the figures you enter. Check the result against your firm's methodology before relying on it.

The formulas

  • Base = min(sales, quota) x base rate
  • Accelerator = max(0, sales - quota) x accelerator rate
  • Recomputed = base + accelerator

How it works

Commission plans are rules, so commission expense can be recomputed exactly from the plan and the sales credited to each rep. Read the plan for the definition of commissionable sales: billed, collected, net of returns, or gross margin.

Under ASC 340-40 commissions that are incremental costs of obtaining a contract are capitalized and amortized, unless the entity uses the expedient for amortization periods of one year or less, so the expense recorded can differ from the commission earned. Recompute the earned amount here, then reconcile to the capitalized asset and the amortization.

Illustrative figures only. Check the result against your firm's methodology before relying on it.

Common questions

What about tiered plans with more than two rates?

Run each tier as its own base band, or recompute in a spreadsheet using the same min and max logic.

Should clawbacks be included?

Yes, if the plan claws back commission on returns or nonpayment. Reduce commissionable sales by the clawed back sales.

How many reps should I recompute?

Select reps with a sampling method, or recompute all of them when the data is in a single file.

Formulas on this page are the standard definitions.

Runs in your browser. The figures you type are not sent to CORAA or stored. Check the result against your firm's methodology before relying on it.

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