Progressive Commission
Progressive Commission:
A progressive commission is a commission structure where the commission increases as the sales volume or revenue generated by a sales representative increases over a given month. In the progressive commission, if the sales representative achieves higher sales volumes, they move to higher commission rate tiers. The commission criteria are structured based on the total sales volume achieved each month.
Two types of progressive commission calculation on the monthly basis:
Percentage-Based Progressive Commission:
| Criteria Name | Greater Than | Less Than Equal To | Percentage |
|---|---|---|---|
| Criteria one | 0 | 10000 | 2% |
| Criteria two | 10000 | 50000 | 4% |
| Criteria three | 50000 | 80000 | 5% |
| Criteria four | >80000 | 10% | |
Scenario 1:
Assume the total amount is 30000. Then the percentage-based progressive commission is calculated as follows:
So the amount is 30000 and it lies under criteria name Criteria two. First, the 10000 amount gets calculated in Criteria one then the remaining amount which is 20000 gets calculated in Criteria two. Total commission is the sum of all commissions calculated in the upper criteria.
For Criteria one: 2% of 10000 = 200
For Criteria two: 4% of (30000 - 10000) = 800
Total Commission: 200 + 800 = 1000
Scenario 2:
Assume the total amount is 100000. Then the percentage-based progressive commission is calculated as follows.
So the amount is 100000 and it lies under Criteria four. First, the 10000 amount gets calculated in Criteria one, then the 40000 amount is calculated in Criteria two, then the 30000 amount is calculated for Criteria three and then the remaining amount which is 20000 gets calculated for Criteria four. Total commission is the sum of all commissions calculated in the upper criteria.
For Criteria one: 2% of (10000 - 0) = 200
For Criteria two: 4% of (50000 - 10000) = 1600
For Criteria three: 5% of (80000 - 50000) = 1500
For Criteria four: 10% of (100000 - 80000) = 2000
Total Commission: 200 + 1600 + 1500 +2000 = 5300
Amount-Based Progressive Commission:-
| Criteria Name | Target Amount | Incentive |
|---|---|---|
| Criteria one | 10000 | 1000 |
| Criteria two | 20000 | 3000 |
| Criteria three | 40000 | 6000 |
| Criteria four | 60000 | 9000 |
Scenario 1:
Assume the total target amount is 9999. Then the amount-based progressive commission is calculated as follows.
So the amount is 9999 and it does not lie in any criteria.
Total Incentive: 0.
Scenario 2:
Assume the total target amount is 57999. Then the amount-based progressive commission is calculated as follows.
So the amount is 57999 and it meets the eligibility for all three criteria which are Criteria one, Criteria two and Criteria three. In total, the user is eligible to receive all three incentives.
Total Incentive: 1000 + 3000 + 6000 = 10000.
Scenario 3:
Assume the total target amount is 89000. Then the amount-based progressive commission is calculated as follows.
So the amount is 89000 and it meets the eligibility for all four criteria which are Criteria one, Criteria two, Criteria three and Criteria four. In total, the user is eligible to receive all four incentives.
Total Incentive: 1000 + 3000 + 6000 + 9000 = 19000.
