Short answer: Inside sales and telesales teams with many small orders suit a tiered plan on number of sales, where each sale pays more the more the rep closes. In this example OTE is DKK 42,000 a month with a 70/30 pay mix: DKK 29,400 base, DKK 250 per sale for sales 1-30, DKK 330 for sales 31-40 and DKK 450 from sale 41, plus an activity bonus of DKK 1,800 when the call and sales requirements are met.
The example is illustrative, not a benchmark: the numbers show how the plan calculates, not what an inside sales rep should earn. Amounts are in Danish kroner (DKK) before pension. It is one of ten examples in commission plans by role.
Who is this plan for?
- Inside sales and telesales to small businesses, where orders are similar in size.
- Teams measured on the number of sales or subscriptions per month, for example software, telecoms, energy or media.
- Reps with short sales cycles, where a month is a natural period.
If order sizes vary a lot, commission as a percentage of value works better than an amount per sale. See the account executive plan.
The plan at a glance
| Element | Example |
|---|---|
| Base salary | DKK 29,400 a month |
| Variable pay at 100% | DKK 12,600 a month (DKK 10,800 commission and DKK 1,800 activity bonus) |
| OTE | DKK 42,000 a month (DKK 504,000 a year) |
| Pay mix | 70/30 |
| Target | 40 sales a month |
| Rate | Tiers: DKK 250 per sale for sales 1-30, DKK 330 for sales 31-40, DKK 450 from sale 41 |
| Accelerator and threshold | The tiers act as the accelerator. The activity bonus requires at least 400 completed calls and at least 10 sales in the month |
| Payout | Monthly, with the following month's salary |
| Clawback | Sales cancelled within 30 days are deducted in the next statement |
At 100%, the tiers pay 30 x DKK 250 + 10 x DKK 330 = DKK 7,500 + DKK 3,300 = DKK 10,800. Each tier pays its own rate on the sales inside it. Read more about tiered commission.
Worked example: 70, 100 and 130% of target
| Attainment | 70% | 100% | 130% |
|---|---|---|---|
| Number of sales | 28 | 40 | 52 |
| Sales 1-30 (DKK 250) | DKK 7,000 | DKK 7,500 | DKK 7,500 |
| Sales 31-40 (DKK 330) | DKK 0 | DKK 3,300 | DKK 3,300 |
| Sales from 41 (DKK 450) | DKK 0 | DKK 0 | DKK 5,400 |
| Total commission | DKK 7,000 | DKK 10,800 | DKK 16,200 |
| Activity bonus | DKK 1,800 | DKK 1,800 | DKK 1,800 |
| Base salary | DKK 29,400 | DKK 29,400 | DKK 29,400 |
| Pay for the month | DKK 38,200 | DKK 42,000 | DKK 47,400 |
At 130%, the last 12 sales pay DKK 450 each, DKK 5,400 in total. Pay ends up DKK 5,400 above OTE. At 70%, all 28 sales fall in the first tier and pay is DKK 3,800 below OTE. The activity bonus is paid in all three columns because the requirements are met.
Pitfalls
- Paying for activity alone. A bonus for number of calls rewards calls, not sales. Keep the activity part small and require a minimum number of sales, as in the example.
- Sales that do not stick. With many small orders, cancellations are common. Without a clawback you pay for sales that never become revenue.
- Too many tiers. Three tiers are enough. The rep should be able to work out in their head what the next sale pays.
- Orders of different sizes. If every sale pays the same, the team sells the smallest. Consider a higher amount for larger packages, or commission as a percentage.
- Sales quality. Selling to consumers by phone comes with special rules on telephone sales and the right of withdrawal. Make sure the plan does not reward sales that break them.
Danish rules to know
Short and general, not legal advice. Check your collective agreement and employment contract, and ask your lawyer or employers' association if in doubt.
- Holiday pay on commission: The employee is entitled to compensation for commission lost because of holiday (Danish Holiday Act, ferieloven, sections 17 and 19). Telesales requires the rep to be at work, so holiday usually causes a clear loss of commission. See holiday pay on commission.
- Sickness and parental leave: For salaried employees paid commission, pay during sickness and maternity leave must include the commission they would presumably have earned (Salaried Employees Act, funktionærloven, section 9(3)). Reduce the target of 40 sales pro rata for absence, so sickness does not cost the top tiers. See commission during sick leave.
- Bonus when someone leaves: A salaried employee who leaves during the financial year is entitled to a proportional share of profit shares, gratuities and similar payments (funktionærloven section 17 a). The activity bonus is monthly. If the rep leaves mid-month, describe whether the bonus is shared pro rata. See commission after resignation.
- Changing the plan: A material change, such as a lower rate or a higher threshold, must be notified with the employee's individual notice period. New targets that the agreement expects to be set each period do not, as a rule, require notice. Put the change rules in your commission agreement.
How to put the plan in writing
Use the commission plan template and the commission agreement template. Write down at least:
- What counts as a sale and when it is registered.
- The tiers and amounts, and that each tier applies only to the sales inside it.
- The requirements for the activity bonus and where activity is measured.
- The cancellation window and how cancellations are deducted. See the commission clawback policy template.
Try the numbers
Enter your own tiers in the tiered commission calculator, and test OTE and pay mix in the OTE calculator.
Related plans
- All ten commission plans by role
- SDR commission plan
- Account executive commission plan
- Sales manager commission plan
Terms and models used in this plan: tiered commission model, activity-based bonus, tiered commission in the glossary, clawback, pay mix.
How Prowi helps
Prowi calculates the plan live from your CRM data, reps follow their earnings in the app, and once the period is approved the amount goes on to payroll. Book a demo to see your own plan calculated.
FAQ
How do inside sales reps earn commission?
Often as a fixed amount per sale or a percentage of order value, usually with tiers so each sale pays more as the target gets closer. Many plans also have a small bonus for activity or quality.
Should telesales get a bonus for number of calls?
Only as a small part, and preferably with a sales requirement. Otherwise the plan rewards calls rather than results.
What is a tiered commission plan?
A plan where the rate rises in steps, and each step applies only to the sales inside it. In the example, sales 1-30 pay DKK 250, sales 31-40 pay DKK 330 and sales from 41 pay DKK 450.
Sources
- Danish Salaried Employees Act (funktionærloven), consolidated act no. 1002 of 24/08/2017, sections 9 and 17 a. retsinformation.dk
- Danish Holiday Act (ferieloven), consolidated act no. 152 of 20/02/2024, sections 17 and 19. retsinformation.dk
This article is general information, not legal advice. The worked examples are illustrative.