A commission structure decides how partner earnings are calculated within a commission plan: the rate, the method, and the logic applied to transactions or quota attainment. Choosing well lines partner incentives up with your business goals, whether you want predictable payouts or performance-driven rewards. Zoho PRM offers two structures, flat and tiered.
A fixed percentage is applied to every qualifying transaction or quota achievement. With a 10% rate on a $10,000 transaction, the commission is $1,000, and the same rate applies to every qualifying transaction.
It suits plans where all qualifying transactions should be rewarded equally, calculations should be simple and predictable, and partner performance is fairly consistent. It is easy to understand and manage.
Earnings are calculated using several tiers, so higher transaction values or quota attainment earn a higher rate or amount. This encourages partners to bring in more revenue and exceed targets. Zoho's example:
| Tier | Transaction value | Rate |
|---|---|---|
| Tier 1 | Up to $10,000 | 5% |
| Tier 2 | $10,001 to $25,000 | 8% |
| Tier 3 | Above $25,000 | 12% |
The method decides how earnings are applied across the tiers. Using the table above, on a $20,000 transaction:
| Method | How it works | $20,000 example |
|---|---|---|
| Direct (flat) | The whole transaction is judged against one tier, and that tier's rate applies to the full value. | Falls in Tier 2, so $20,000 x 8% = $1,600 |
| Differential | The value is split across tiers, each portion earns its own tier's rate, and the results are added together. Zoho describes it as rewarding incremental growth. | First $10,000 at 5% = $500, remaining $10,000 at 8% = $800, total $1,300 |
| Prorated differential | Follows the differential principle but applies commission only to the portion consumed within each tier. Zoho describes it as the most granular method, giving more accurate payouts and better cost control. | Zoho gives no worked figures for this method |
| Use flat when | Use tiered when |
|---|---|
| Simplicity matters | Performance should be rewarded progressively |
| All transactions earn the same rate | Higher contributions should earn higher rewards |
| Predictable payouts are preferred | Revenue growth is a primary goal |
| Partner performance is fairly consistent | Partner performance varies significantly |