Setting Up Tiered Commission

Steps to Set Up Tiered Commission

1. From the “Add Commission Rule” screen, in the “Rule Information” section, select the rule type “Tiered Commission” — this is selected by default.
2. The “Applies to the Following Items” table appears to define what counts toward target achievement. Fill in each line with:
   • Item Type: Select “Item” to specify individual products, “Category” to select entire categories, or “All Products.”
   • Elements: Select the required products or categories. This field is disabled when “All Products” is selected.
   • Contribution Percentage: Set the percentage of each invoice that counts toward target achievement. Defaults to 100%.
   • To add another range with a different contribution percentage, click “Add.” To delete any line, click the trash icon.
3. From the “Commission Tiers” section, specify:
   • Commission Type (Required): “Fixed Amount” to set each tier’s commission as a monetary amount, or “Percentage of Achievement” to set it as a percentage.
   • Calculation Type (Required): Define how commission is calculated between tiers: “Linear”, “Highest”, or “Lowest.” Linear is selected by default.
4. From the “Tiers” table, define the commission tiers. For each tier:
   • Target Achievement: The target achievement percentage required for this tier.
   • Commission: The commission value corresponding to this tier (as an amount or percentage, based on the selected commission type).
5. To add a new tier, click “Add.” Complete the remaining sections of the rule then click “Save.”

How the System Works

Contribution percentage is not the commission rate — it controls how much of each invoice counts toward target achievement. Example: an invoice worth 1,000 with a 50% contribution percentage adds only 500 toward target achievement. When more than one line is defined, the system sums the contributions from all lines.

The system calculates the achievement percentage by dividing total contributions by the target value defined in the “Target Information” section, then determines the commission based on the selected calculation type:

• Linear: Distributes the commission proportionally between the two tiers surrounding the achievement percentage. Example: target is 10,000 and the employee achieved 6,500 (65% achievement). Surrounding tiers: 60% → 400 and 100% → 2,000. Commission = 400 + (2,000 − 400) × (65% − 60%) ÷ (100% − 60%) = 600.
• Highest: Uses the next tier above the achievement percentage. Using the same example: the commission of the 100% tier = 2,000 is applied.
• Lowest: Uses the last tier the employee fully reached. Using the same example: the commission of the 60% tier = 400 is applied.

When the commission type is “Percentage of Achievement,” the same mechanism applies to percentages and the result is then multiplied by the target value. Example using linear calculation: tiers are 60% → 4% and 100% → 20%, achievement is 65%. Percentage = 4% + (20% − 4%) × (65% − 60%) ÷ (100% − 60%) = 6%. Commission = 10,000 × 6% = 600.

Commission is calculated at the sales period level, not per invoice, and is automatically recalculated with every invoice, refund, or credit note until the period is approved. For this reason, commission appears as a dash “–” in individual sales commission records.

Validation Rules

• At least one item line is required in the items table, otherwise the message appears: “At least one item line is required.”
• The contribution percentage must be between 0.01 and 100, otherwise the message appears: “Contribution must be between 0.01 and 100.”
• Duplicate target achievement percentages are not allowed across tiers, otherwise the message appears: “Duplicate target achievement percentages are not allowed.”
• The maximum number of tiers is 20.
• Upon saving, the system automatically re-sorts tiers in ascending order based on target achievement percentage.