Sales Commission Rates by Industry [2026 Benchmarks]

Sales commission rates vary dramatically depending on the industry you work in, the complexity of the sale, and the average deal size your team handles. A SaaS account executive selling six-figure contracts operates in a fundamentally different compensation world than a retail insurance agent writing homeowner policies.

Understanding where your commission rates stand relative to industry benchmarks is critical. Pay too little and your best reps leave for competitors. Pay too much and you erode margins without a proportional lift in performance. This guide breaks down commission rates across 15 major industries with real 2026 benchmarks, typical plan structures, and on-target earnings (OTE) ranges.

Commission Rates at a Glance

The table below summarizes typical commission structures and ranges across 15 industries. These figures represent base-level individual contributor roles and mid-market deal sizes. Enterprise and SMB segments will skew higher and lower respectively.

| Industry | Typical Structure | Commission Range | Avg OTE | |---|---|---|---| | SaaS / Cloud Software | Base + variable (tiered) | 8-15% of ACV | $140K-$210K | | Real Estate (Residential) | Straight commission | 2.5-3% of sale price | $55K-$110K | | Real Estate (Commercial) | Straight or draw | 1.5-4% of lease/sale value | $90K-$250K | | Insurance (Personal Lines) | Base + commission | 5-15% of first-year premium | $50K-$85K | | Insurance (Commercial) | Base + commission | 8-15% of premium + renewals | $75K-$130K | | Financial Services | Base + variable | 0.5-2% of AUM or 15-40% of fees | $100K-$200K | | Pharmaceutical / Medical | Base + bonus | 5-10% of net revenue | $120K-$180K | | Medical Devices | Base + commission | 10-25% of revenue | $130K-$220K | | Technology / Hardware | Base + variable (tiered) | 5-12% of revenue | $110K-$175K | | Manufacturing / Industrial | Base + commission | 3-8% of revenue | $70K-$120K | | Telecommunications | Base + commission | 6-12% of MRR/TCV | $80K-$130K | | Media / Advertising | Base + commission | 8-15% of media spend | $75K-$140K | | Staffing / Recruiting | Base + commission | 15-25% of placement fees | $65K-$130K | | Wholesale / Distribution | Base + commission | 1-5% of revenue | $55K-$90K | | Automotive | Draw + commission | 20-30% of gross profit | $50K-$95K |

The ranges above represent mid-market benchmarks. Your exact rates will depend on base salary levels, territory size, deal complexity, and whether you operate in an inbound or outbound motion.

SaaS / Cloud Software

SaaS sales compensation is one of the most standardized and well-documented industries for commission planning. The recurring revenue model creates a natural alignment between rep incentives and company growth.

Typical Structure

Most SaaS companies use a base salary plus variable commission structure, often with tiered accelerators above quota. The standard base-to-variable split is 50/50 to 60/40, meaning a rep with $200K OTE earns $100K-$120K in base salary and $80K-$100K in variable pay at 100% attainment.

Commission Rates

• New business ACV: 8-12% is standard for mid-market. Enterprise reps selling $200K+ ACV deals may see 6-8% with higher bases. SMB reps on transactional deals often earn 10-15%.
• Expansion / upsell: Typically 4-8%, or roughly half the new business rate.
• Renewal commission: 1-3% of ARR if reps handle renewals, though many orgs split this to customer success.
• Accelerators: 1.2x to 2x multipliers above 100% quota attainment are standard. Top-performing SaaS orgs offer uncapped accelerators above 120-150% attainment.

OTE Ranges

• SDR/BDR: $65K-$90K OTE
• Mid-market AE: $140K-$180K OTE
• Enterprise AE: $200K-$320K OTE
• VP of Sales: $280K-$500K+ OTE (heavily weighted toward variable)

SaaS compensation tends to update annually. Companies with strong growth often increase OTE targets by 5-10% year over year to remain competitive in the talent market.

Real Estate

Real estate is one of the few industries where straight commission (no base salary) remains the dominant model. Agents typically operate as independent contractors, which means they cover their own business expenses from commission earnings.

Residential

Residential agents usually split their commission with their brokerage. A typical home sale generates a 5-6% total commission split between the listing and buyer agents. After the brokerage split, an individual agent might net 1.25-2% of the sale price.

For a $400K home sale at 5% total commission:

• Total commission: $20,000
• Listing-side: $10,000
• Agent share after 70/30 brokerage split: $7,000 (1.75% effective rate)

High-producing agents often negotiate better brokerage splits (80/20 or 90/10), some reaching 100% with a flat monthly desk fee.

Commercial

Commercial real estate commissions are more variable. Lease commissions typically range from 3-6% of total lease value, while sales transactions pay 1.5-4% of the sale price. Larger deals push the percentage lower while the absolute dollar amount increases significantly.

A $5M commercial property sale at 2.5% generates $125,000 in gross commission. After a 50/50 brokerage split, the agent earns $62,500 from a single transaction.

Insurance

Insurance compensation models differ significantly between personal lines (auto, home, life) and commercial lines (business liability, workers comp, property).

Personal Lines

Personal lines agents typically earn 5-15% of first-year premiums on new policies. Renewal commissions, which are critical for long-term income stability, generally run 2-5% of the annual premium and recur for the life of the policy.

A new homeowner policy with a $2,000 annual premium at 12% first-year commission pays $240 up front, then $60-$100 per year in renewals. Volume is the key driver of income in personal lines, as individual policy values are relatively small.

Commercial Lines

Commercial insurance agents work with larger accounts and earn 8-15% on new business with 3-8% renewal commissions. An agent placing a $50,000 commercial liability policy at 10% earns $5,000 on the initial sale. The renewal commission of 5% generates $2,500 per year for as long as the policy stays active.

Many agencies also offer profit-sharing bonuses and contingency payments based on the agency's overall book performance, adding another 2-5% of total book value.

Financial Services

Financial services compensation is complex and heavily regulated. Structures vary widely depending on whether the role involves wealth management, investment banking, lending, or institutional sales.

Wealth Management

Financial advisors and wealth managers typically earn based on assets under management (AUM). The standard fee is 0.75-1.25% of AUM annually, with the advisor receiving 30-50% of that fee as their payout. As AUM grows, the payout grid often increases.

An advisor managing $50M in client assets at 1% management fee generates $500K in revenue. At a 40% payout rate, their gross income is $200K. Top producers managing $200M+ often negotiate payouts of 45-55%.

Lending

Mortgage loan officers typically earn 0.5-1.5% of the loan amount as commission. On a $400K mortgage at 1% commission, the LO earns $4,000. Some firms offer a base salary plus a reduced commission rate, while others run pure commission models.

Pharmaceutical / Medical Sales

Pharma reps generally earn a competitive base salary ($75K-$100K) plus variable compensation tied to territory performance, prescription volume, or revenue targets.

Commission Rates

Pure commission rates in pharma are typically 5-10% of net revenue generated in the territory. However, many pharmaceutical companies use bonus-based plans rather than pure commission, paying quarterly or annual bonuses of $20K-$80K based on territory goal attainment.

Medical Devices

Medical device sales offer some of the highest commission rates across all industries. Reps selling implants, surgical equipment, or diagnostic tools often earn 10-25% of revenue. The high rates reflect the technical expertise required, long sales cycles, and the need for reps to be present during surgical procedures.

A medical device rep selling $1.5M in annual revenue at 15% commission earns $225K in variable pay. Combined with a $90K base, total compensation reaches $315K. Top performers in orthopedic and cardiovascular device sales can exceed $500K in total earnings.

Technology / Hardware

Technology hardware sales, including servers, networking equipment, and enterprise infrastructure, typically use a base plus commission structure with tiered accelerators.

Commission Rates

Standard commission rates for technology hardware range from 5-12% of revenue, with the rate depending on whether the sale includes hardware only or a bundled hardware-plus-services deal. Services and maintenance contracts often carry higher commission rates (10-15%) because of their recurring nature and higher margins.

Quota for a mid-market tech hardware rep might be $1.5M-$3M in annual revenue, with OTE of $110K-$175K. Enterprise reps carrying $5M+ quotas typically earn $180K-$280K OTE.

Manufacturing / Industrial

Manufacturing sales tend to have lower commission rates but larger deal sizes and longer customer relationships. Reps often manage existing accounts alongside new business development.

Commission Rates

• New business: 5-8% of first-year revenue
• Existing account growth: 2-4% of incremental revenue
• Maintenance / reorders: 1-3% of recurring revenue

A manufacturing rep managing a $5M territory with $1M in new business at 6% commission and $4M in renewals at 2% earns $60K + $80K = $140K in variable pay. With a $70K base, total compensation reaches $210K.

Telecommunications

Telecom commission structures vary depending on whether the rep is selling to consumers, small businesses, or enterprise accounts.

Commission Rates

• Consumer / SMB: 6-10% of monthly recurring revenue (MRR) paid as a one-time commission, or 50-100% of first-month MRR
• Mid-market: 8-12% of total contract value (TCV), often paid over the contract term
• Enterprise: 5-8% of TCV with accelerators above quota

A mid-market telecom rep closing a 3-year, $120K TCV deal at 10% earns $12,000 on the transaction. With a quota of $1.2M TCV, achieving 100% attainment generates $120K in variable pay.

Media / Advertising

Advertising sales commission rates are typically based on media spend or insertion order value. Digital media tends to pay higher commission rates than traditional media.

Commission Rates

• Digital advertising: 10-15% of media spend
• Traditional media (TV, radio, print): 8-12% of media spend
• Programmatic / managed services: 5-10% of revenue
• New account bonus: Many agencies offer 15-25% commission on first orders from new clients

A digital advertising AE managing $2M in annual client spend at 12% commission earns $240K in variable compensation. However, many media companies cap commissions or use declining rates on large accounts to manage margin.

Staffing / Recruiting

Staffing and recruiting agencies typically charge clients a placement fee equal to 15-25% of the candidate's first-year salary. The recruiter's commission on that fee ranges from 15-25% of the fee collected.

For a $120K placement with a 20% fee ($24K) and a 20% recruiter commission, the recruiter earns $4,800 per placement. High-volume recruiters placing 3-5 candidates per month can earn $170K-$290K annually.

Contract staffing commissions work differently: recruiters typically earn a per-hour spread of $3-$10 for every hour the contractor works, accumulating over the length of the assignment.

Factors That Affect Commission Rates

Beyond industry, several factors directly influence where your commission rates should land.

Deal Size and Sales Cycle

Larger deals with longer sales cycles generally carry lower commission rates but higher absolute payouts. A rep closing one $500K enterprise deal per quarter at 6% earns $30K per deal, while an SMB rep closing twenty $10K deals per month at 12% earns $24K per month. The per-transaction economics differ, but the overall compensation can be similar.

Market Competition for Talent

In hot markets (AI/ML, cybersecurity, fintech), companies routinely pay 10-20% above industry benchmarks to attract experienced reps. If your top competitors offer $180K OTE, you likely need to match or exceed that to land quality hires.

Base Salary Level

Higher base salaries naturally correspond to lower commission rates, and vice versa. A 70/30 base-to-variable split at $200K OTE means $140K base and $60K variable, allowing for lower percentage-based commissions. A 50/50 split at the same OTE doubles the variable component to $100K, requiring higher commission rates on the same quota.

Product Margin

High-margin products (software, services) can support higher commission rates than low-margin products (commodity hardware, wholesale goods). SaaS companies with 80%+ gross margins comfortably pay 10-12% commission, while a distributor operating on 15% margins caps commissions at 1-3%.

Inbound vs. Outbound Motion

Inbound-led reps who receive qualified leads often earn lower commission rates (since the company bears the marketing acquisition cost) than outbound reps who source their own pipeline. A common approach is to pay 10% on inbound-sourced deals and 12-15% on outbound-sourced deals.

How to Choose the Right Commission Rate

Selecting your commission rates requires working backward from three key variables: your target OTE, your expected quota, and your desired base-to-variable ratio.

Step 1: Determine target OTE. Research competitive OTE for your industry, geo, and role level. This is the total cash compensation a rep should earn at 100% quota attainment.

Step 2: Set the base-to-variable split. Most B2B roles use 50/50 to 60/40. Transactional roles may skew toward more variable (40/60). Enterprise roles with long cycles may favor 60/40 or 70/30.

Step 3: Calculate the required variable. Subtract the base from OTE. This is the total commission payout at 100%.

Step 4: Set quota. Quota should typically be 4-6x the OTE for healthy unit economics. A rep with $200K OTE should carry $800K-$1.2M in quota.

Step 5: Derive the commission rate. Divide the variable component by the quota. If variable is $100K and quota is $1M, the base commission rate is 10%.

Step 6: Layer in accelerators. Add 1.2-2x multipliers above quota to reward overperformance and drive outsized results.

This math-based approach ensures your commission rates are internally consistent and externally competitive. Avoid setting rates by gut feel or copying competitors without understanding the underlying economics.

Frequently Asked Questions

What is the average sales commission rate?

Across all industries and roles, the average sales commission rate falls between 5% and 15% of revenue. However, this number is misleading on its own because it spans such a wide range of industries, deal sizes, and compensation structures. A more useful benchmark is to look at your specific industry, deal type, and role level.

What is a good commission rate for SaaS sales?

Most SaaS companies pay 8-12% commission on new business annual contract value (ACV) for mid-market account executives. Enterprise reps working larger deals typically earn 6-8%, while SMB reps on transactional deals see 10-15%. Expansion and renewal commissions are generally set at 40-60% of the new business rate.

Which industry pays the highest sales commissions?

In terms of commission rates, medical device sales consistently ranks among the highest at 10-25% of revenue. In terms of absolute earnings, enterprise SaaS and financial services often produce the highest total compensation, with top performers earning $400K-$800K+ annually. Commercial real estate also offers significant earning potential on large transactions.

Should commission rates be capped?

Most compensation experts advise against capping commissions. Caps demotivate top performers and can cause reps to sandbag deals into the next period. If margin concerns exist, consider using decelerators (reduced rates above a very high threshold like 200% attainment) rather than hard caps.

How often should you review commission rates?

Review your commission rates at least annually, ideally during your fiscal year planning cycle. Mid-year adjustments should only happen if there are significant market changes (new competitors, pricing shifts, product launches) that fundamentally alter the selling environment. Frequent changes erode rep trust and make it harder to recruit experienced sellers.

What is the difference between commission rate and commission percentage?

These terms are often used interchangeably. Commission rate refers to the percentage of revenue, deal value, or profit that a rep earns as variable compensation. Some organizations use "commission rate" to describe the variable component as a percentage of OTE rather than revenue, so always clarify the denominator when comparing rates.

How do accelerators work with commission rates?

Accelerators increase the commission rate above certain attainment thresholds. For example, a plan might pay 10% on deals up to 100% quota, then 15% (a 1.5x accelerator) on deals from 100-150% quota, and 20% (2x) above 150%. This rewards overperformance and motivates reps to continue closing after they hit quota.

Should new hires receive the same commission rate as tenured reps?

Most companies offer the same commission rates to all reps at the same level but provide new hires with ramp guarantees or draws during their first 3-6 months. This ensures new reps can cover living expenses while building pipeline, without creating a two-tier commission structure that breeds resentment.

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Getting your commission rates right is one of the most impactful decisions in sales operations. The benchmarks in this guide give you a starting point, but the real work is tailoring rates to your specific business model, margins, and growth targets.

If you are looking to automate commission calculations across any of these structures, try SimpleRev's commission calculator to model different rate scenarios. Ready to manage your entire commission program? Get started with SimpleRev and build your first plan in minutes.