SaaS Commission Calculator

This SaaS Sales Commission Calculator models out break even points and average net monthly recurring revenue (Net MRR) based on different Cost of Sales factors.

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Inputs

# of Monthly Customers Added
Average MRR (monthly recurring revenue) per customer
Base Sales Compensation Rate
Base Sales Commission Rate
Hurdle Rate (optional)

Outputs

Average MRR Added
Sales Commission Earned
Total Cost of Sales (Base + Commission)
Net MRR = Monthly MRR added minus Cost of Sales

Best practices on SaaS Commission Plans

As a rule of thumb, sales eps Total Compensation (OTE, 'on target earnings') should be 50% Base Salary/50% Commission at Plan
Pay Reps on Total Contract Value up front. This encourages sales to focus on long term contracts. Risk is issue with payments/cancellation but this is outweighed by the benefits of longer term deals and higher TCV. You can implement a claw-back from commission for cancellations. Admittedly paying commissions up front can be more challenging for bootstrapped startups vs. funded companies.
Consider higher commission % for annual vs. monthly deals

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