Short answer: A sales manager who also sells can earn an override commission on the team's results plus commission on their own quota. In this example the manager leads 5 AEs with a combined quarterly quota of DKK 4,200,000. OTE is DKK 900,000 a year with a 60/40 pay mix. The override is 1.5% of the team's new ARR up to quota and 2.25% above it, and the own quota of DKK 270,000 pays 10%, and 15% above quota.
The example is illustrative, not a benchmark: the numbers show how the plan calculates, not what a sales manager 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?
- Team leads and sales managers who run a small team and have some accounts of their own.
- Companies where the manager is close to daily operations and can influence the team's results directly.
- Teams on the same type of plan, for example AEs with a quota on new ARR, so the team quota is the sum of their quotas.
If the manager has no accounts of their own, put all variable pay on the team. We cover five bonus models for sales managers in our sales manager salary and bonus guide.
The plan at a glance
| Element | Example |
|---|---|
| Base salary | DKK 45,000 a month (DKK 135,000 a quarter) |
| Variable pay at 100% | DKK 90,000 a quarter: DKK 63,000 override (70%) and DKK 27,000 own commission (30%) |
| OTE | DKK 900,000 a year |
| Pay mix | 60/40 |
| Metrics | Team new ARR (quota DKK 4,200,000 = 5 x DKK 840,000) and own new ARR (quota DKK 270,000) |
| Rate | Override 1.5% of team ARR. Own commission 10% |
| Accelerator and threshold | Above quota: override 2.25% and own commission 15% (1.5x). No override below 50% of team quota (DKK 2,100,000) |
| Payout | Quarterly, with the salary for the month after quarter end |
| Clawback | Follows the AEs' clawback: if an AE's commission is reversed, the override is reversed too |
The manager's own deals do not count toward the team quota. Otherwise the same deal would pay both override and own commission. Read more about override commission.
Worked example: 70, 100 and 130% of quota
In the example, the team and the manager reach the same percentage of their quotas.
| Quota attainment | 70% | 100% | 130% |
|---|---|---|---|
| Team new ARR | DKK 2,940,000 | DKK 4,200,000 | DKK 5,460,000 |
| Override | DKK 44,100 | DKK 63,000 | DKK 91,350 |
| Own new ARR | DKK 189,000 | DKK 270,000 | DKK 351,000 |
| Own commission | DKK 18,900 | DKK 27,000 | DKK 39,150 |
| Variable pay | DKK 63,000 | DKK 90,000 | DKK 130,500 |
| Base salary for the quarter | DKK 135,000 | DKK 135,000 | DKK 135,000 |
| Pay for the quarter | DKK 198,000 | DKK 225,000 | DKK 265,500 |
At 130%, the override is 1.5% of DKK 4,200,000 plus 2.25% of DKK 1,260,000 = DKK 63,000 + DKK 28,350 = DKK 91,350. Own commission is DKK 27,000 + 15% of DKK 81,000 = DKK 39,150. At 70%, the team is above the DKK 2,100,000 threshold, so the override is paid from the first krone.
How many salespeople a manager typically has relative to company size is shown in our data on salespeople per employee.
Pitfalls
- Too large an own quota. If the manager spends most of their time on their own accounts, the team is not managed. Keep the own part small, for example a third of variable pay as in the example.
- Double crediting. If the manager's own deals count toward the team quota, you pay twice for the same deal.
- The team changes. When an AE starts or leaves mid-quarter, the team quota must be adjusted. Write the rule down.
- Override without a threshold. Without a threshold the manager earns on a weak team. The threshold in the example is 50%.
- A copy of the reps' plan. The manager should be rewarded for the team's result, not just their own sales. See also team bonus.
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). The override depends on the team's sales and may be little affected by the manager's holiday. Own commission can show a loss. Describe the method for both. 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)). For longer absence another manager may take over the team. Decide who gets the override in that period. 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). If the override is designed as a quarterly or annual bonus, section 17 a can give a right to a proportional share on leaving. 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:
- Which reps are in the team, and how the team quota is adjusted when it changes.
- That own deals do not count toward the team quota.
- The threshold and accelerator for the override.
- How clawbacks on the reps' deals affect the override.
Try the numbers
Split the team quota in the sales quota calculator, and see the accelerator in the commission accelerator calculator.
Related plans
- All ten commission plans by role
- Account executive commission plan
- SDR commission plan
- Inside sales commission plan
Terms and models used in this plan: override commission, team bonus, target bonus, sales quota, accelerator.
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
What is override commission?
Commission paid to a manager on what the team sells. In the example it is 1.5% of the team's new ARR up to quota.
Should a sales manager earn commission on their own sales?
If the manager has their own accounts, yes, but keep that part small so the management job is not crowded out. In the example it is 30% of variable pay.
How large should a sales manager's variable pay be?
There is no fixed answer. In the example the pay mix is 60/40. See the sales manager salary and bonus guide for more models.
How is the override rate calculated?
Divide the part of variable pay that should come from the team by the team quota: DKK 63,000 / DKK 4,200,000 = 1.5%.
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.