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Commission Structure Template
Complete policy document template for designing and documenting your partner commission structure. Includes flat rate, tiered, and hybrid models with examples and calculations.
What's Included in This Template
📋 Policy Documentation
- • Commission philosophy and objectives
- • Partner eligibility criteria
- • Qualified products and services
- • Payment terms and schedules
💰 Commission Models
- • Flat rate commission structure
- • Tiered/graduated commission structure
- • Hybrid (base + performance bonus)
- • Recurring vs. one-time options
📊 Examples & Calculations
- • Real-world calculation examples
- • Multi-year deal handling
- • Expansion and upsell scenarios
- • Tier achievement examples
⚖️ Policies & Compliance
- • Cancellation and chargeback rules
- • Discounting impact policies
- • Dispute resolution process
- • Tax and legal considerations
Commission Model Comparison
| Model | Best For | Pros | Cons | Typical Rate |
|---|---|---|---|---|
| Flat Rate | Simple programs, consistent deal sizes | Easy to understand, predictable for partners | No incentive to exceed targets | 25% |
| Tiered | Mature programs, want to drive volume | Motivates growth, rewards top performers | Complex calculations, tier gaming | 20-35% |
| Hybrid | Performance-focused, clear targets | Balances base + upside, goal-oriented | Requires target-setting, more admin | 20% + 5-10% |
| One-Time | Referral partners, simple programs | Simple payout, easy accounting | Not aligned with SaaS recurring model | 30-40% |
| Recurring (12mo) | SaaS resellers, ongoing relationships | Aligned incentives, partner retention | Higher admin, complex tracking | 25% |
📊
Flat Rate Model
Deal Size:$10,000/yr
Commission Rate:25%
Payment Type:12mo recurring
Annual Commission:$2,500
Monthly:$208.33
Same rate for all partners regardless of volume. Simple and predictable.
📈
Tiered Model
Q Revenue:$100,000
$0-25K @ 20%:$5,000
$25-75K @ 25%:$12,500
$75-100K @ 30%:$7,500
Total Commission:$25,000
Higher rates at higher volumes incentivize growth and reward top performers.
🎯
Hybrid Model
Q Revenue:$60,000
Q Target:$50,000
Achievement:120%
Base (20%):$12,000
Bonus (7.5%):$4,500
Total Commission:$16,500
Base commission plus performance bonus for hitting quarterly targets.
Key Decision Points for Your Commission Structure
1. One-Time vs. Recurring Commission
✓ Choose Recurring If:
- • You have a SaaS subscription model
- • You want partners invested in customer success
- • You can handle monthly payout admin
- • Customer lifetime value is high
✓ Choose One-Time If:
- • You sell perpetual licenses or services
- • Partners are pure referral (don't manage relationship)
- • You want simpler accounting
- • Deal sizes are very large (>$50K)
2. Flat vs. Tiered Commission Rates
✓ Choose Flat Rate If:
- • You're just launching your partner program
- • Deal sizes are relatively consistent
- • You want maximum simplicity
- • Most partners will be similar volume
✓ Choose Tiered If:
- • You want to drive volume growth
- • You have mature partner program
- • Partner performance varies widely
- • Margins allow for volume discounting
3. Commission Duration for Recurring Models
12 Months:Most common. Balances partner motivation with vendor cost. Recommended for most SaaS programs.
Lifetime:Best for resellers who own customer relationship and handle all support. Use lower % (10-15%).
6 Months:For referral-only partners who don't manage customer. Use higher % (30-35%) to compensate.
Industry Benchmark Commission Rates
Based on SaaS partner program data (rates shown are typical ranges)
By Partnership Type
Value Reseller (manages customer)25-35%
Referral Partner (intro only)15-20%
Implementation Partner10-15%
Agency/Marketing Partner15-25%
By Deal Type
New Customer Acquisition25-30%
Expansion/Upsell15-20%
Renewal (if partner manages)10-15%
Cross-Sell (new product)20-25%
Implementation Checklist
📋 Before Launch
- □Calculate commission cost as % of revenue (should be <20%)
- □Ensure commission + CAC is less than customer LTV
- □Choose commission model (flat/tiered/hybrid)
- □Determine payment frequency and minimums
- □Set up commission tracking system or spreadsheet
- □Create commission policy document
- □Add commission terms to partner agreement
🚀 After Launch
- □Communicate commission structure clearly to all partners
- □Provide commission visibility in partner portal
- □Send monthly commission statements
- □Review commission costs quarterly vs. budget
- □Collect partner feedback on commission structure
- □Monitor for gaming or abuse
- □Adjust rates/structure as program matures