SaaS Sales Commission and Quota Calculator

How the commission math works

• Variable pay = OTE − base salary.
• Base commission rate = variable pay ÷ annual quota. At 100% of quota the rep earns exactly the variable.
• Accelerators multiply the rate for the attainment inside each tier. Commission = variable × the sum over tiers of (share of quota in the tier × multiplier).
• Decelerator (optional) applies a lower multiplier to attainment below a threshold.
• Effective rate = commission ÷ new ARR booked. It rises above the base rate once accelerators apply.
• Cost of sales per $1 of new ARR = (base + commission) × (1 + on-costs) ÷ new ARR booked.
• Cash-on-cash payback per rep = the first month M where Σ (gross margin × cash collected) from month 1 to M ≥ Σ (base ÷ 12 + commission paid − clawbacks) × (1 + on-costs) over the same months.

Commission here is a share of the new ARR a rep books (the first-year contract value of new business). Renewals pay no commission. The cash model applies the year's effective rate to each month's bookings, as if accelerators were trued up across the year; real plans usually pay the accelerator once cumulative attainment passes 100%, which moves some cash later in the year without changing the total.

Worked example (the default inputs)

The defaults are an illustrative AE. Quota is $875,000, the 2026 median for SaaS companies in the Bridge Group's AE report, and OTE is $200,000, the report's median across all companies, split 50/50 between base and variable. The rate is $100,000 ÷ $875,000 = 11.43%. At 125% of quota the rep earns $100,000 for the first 100% plus 25% × 1.5 × $100,000 = $37,500 for the next 25%, so $137,500. At 150% another 25% × 2 × $100,000 brings it to $187,500, an effective rate of 14.29%. Cost of sales per dollar still falls as attainment rises, from $0.34 at 50% to $0.22 at 125%, because base is fixed.

At the planned 75%, a ramped rep books $656,250 a year and earns $75,000, total pay $175,000: $0.27 per dollar of new ARR. The first year is dearer. The ramp (14% of a monthly quota in month 1 up to 86% in month 6) adds up to three months of quota out of six, so year-one bookings are 9 ÷ 12 × $656,250 = $492,188, the same figure the sales capacity calculator gives for a month-1 hire. Base is paid in full, so year one costs $0.32 per dollar, and $25,000 of the salary pays for quota the rep was not yet carrying.

Month 1, by hand: the rep books $875,000 ÷ 12 × 14% × 75% = $7,656 of ARR. On monthly billing that collects $638 in the month, worth $479 of gross margin. Costs are $8,333 of base plus $875 of commission (11.43% of the booking), so the month is −$8,730 in cash. The hole deepens until month 7, at $42,318, then each month's growing collections pay it back. The cumulative line crosses zero in month 12.

Three changes move that number a lot:

• Annual prepaid billing: a year of cash arrives at booking, so payback falls to 3 months and the most cash tied up to $3,466.
• Commission paid as the customer pays (still monthly billing): payback 10 months, peak cash out $27,181. The rep's total commission is the same, only later.
• A 6-month clawback with 10% of new ARR cancelling inside it: $1,875 of first-year commission comes back, but the lost revenue costs more than the clawback returns, and payback stays at 12 months. A clawback protects the comp budget, not the rep's economics.

A decelerator changes cost at low attainment. With half the rate below 50% of quota, the same rep at 75% earns $50,000 instead of $75,000, and at 40% earns $20,000 instead of $40,000.

How this fits CAC and sales capacity

Per-rep payback is one slice of customer acquisition cost: base and commission are the largest people line in sales and marketing spend, but CAC also carries marketing programs, SDRs, sales managers and tools. So the company's CAC payback will be longer than the rep's own. Use the sales capacity calculator to size how many AEs a bookings target needs, then this one to see what each one costs and when their cash comes back. The go-to-market guide covers when a sales-led motion pays at all.

For your accounts, US GAAP treats commissions as a cost of obtaining a contract under ASC 340-40, usually capitalized and spread over the customer relationship rather than expensed when paid. This calculator is a cash view; the SaaS revenue recognition guide covers the accounting side.

Where the benchmarks come from

The Bridge Group's 2026 AE Models, Motions and Metrics report (158 B2B companies, published June 22, 2026) gives a median AE on-target earnings of $200K (up from $190K in 2024), a median quota of $960K overall and $875K for SaaS companies, a quota-to-OTE ratio of 4.6x (4.2x in 2024), and 48% of reps at quota. The defaults use the SaaS quota with the all-company OTE, which gives 4.4x. Pay mix, accelerator tiers, ramp percentages and the 75% gross margin are illustrative inputs, not benchmarks: set them from your own plan.

The calculator models one rep, one quota and new-business ARR only. It assumes no churn beyond the clawback input, no draw or ramp guarantee, and treats gross margin on cash collected as the cash contribution. It is a planning estimate, not payroll or accounting advice.

Source: Bridge Group, 2026 AE Models, Motions and Metrics, read October 22, 2026.