Commissions /commission/commission refers to the share of a sale that is paid to a salesperson or employee as a reward for generating revenue. The commission acts as an incentive and is often a key element of performance pay, where the employee's income directly depends on performance.
When a trade is closed, the commission is typically calculated as a percentage of the value of the sale or as a fixed amount per transaction. This means that the more the seller performs, the higher the total salary will be. Commission is especially used in sales organizations, where there is a clear correlation between the efforts of the individual and the earnings of the company.
There are several widely used models: