How to create a commission scheme

A commission scheme sets out who earns commission, on what, at what rate and when it is paid. This guide explains how to set one up in a way that is clear to the people paid under it and easy to check before anyone is paid. It follows the five stages Perslace uses to build a scheme, but the same order works whatever tool you use.

Last updated: 31 Oct 2026

Before you start

Agree the design before you build anything. You will need:

An approved scheme design and how often it pays (for example, monthly or quarterly)
The figures the scheme is based on, such as revenue or number of deals, and where that data comes from
The eligibility conditions, rules and tier boundaries, signed off by whoever owns the scheme
The people the scheme covers and the date it takes effect
A small set of realistic test data, and the name of the person who can approve the scheme

If any of these are still under discussion, settle them first. Building a scheme around open questions usually means rebuilding it later.

Stage 1: Set up the scheme

Give the scheme a clear name and a short description that a payee would understand. Choose how often it is calculated. Decide how negative revenue, such as a refund or credit note, should be treated: whether it is carried forward into the next period or not.

Choose the scheme type carefully. In Perslace the scheme type cannot be changed once the scheme has been created, so confirm it before you continue. If you are building a short, time-limited incentive such as a sales competition or SPIF, use Campaign Mode instead of a standard scheme.

Stage 2: Decide who and what qualifies

Qualifiers are the conditions that apply to the whole scheme, for example only closed-won deals, a particular product line or a specific region. Each condition has a property, an operator and a value, and you combine conditions with AND or OR.

Test them straight away. Pick a few records that should be included and a few that should not, and check that each one lands on the right side. Most "missing commission" questions come back to a qualifier that is narrower than intended.

Stage 3: Build the rules

Rules turn qualifying activity into commission. First decide how the rules relate to each other:

Apply All: every matching rule pays
First Match: only the first matching rule pays
Best Match: the matching rule that pays most is used
Lowest Match: the matching rule that pays least is used

Then set up each rule: whether it measures an individual or a team total, which figure it uses (a sum, a count, or target achievement), any extra conditions, the payout type and the calculation method.

Tiers need particular care. Make them continuous, with no gaps or overlaps between bands, and test a value just below, exactly on and just above every boundary. Only add a cap if the approved design includes one.

Example (illustrative only): a scheme pays 5% on monthly sales up to £50,000 and 7% above it. Test £49,999, £50,000 and £50,001, and agree in advance which rate applies to the £50,000 itself. Whether a higher rate applies to the whole amount or only to the part above the boundary depends on the calculation method you choose, so write the expected result down before you test.

Stage 4: Add manager overrides if you need them

If managers earn on their team's results, set up a direct-manager override. For more levels of management, create a separate manager scheme rather than stretching one scheme to cover everyone.

Stage 5: Review, test and publish

Review the whole scheme in one place: setup, assignment and dates, qualifiers, rules and any validation messages. Then test it against past data. In Perslace, Historical Replay (Run Backtest) runs the scheme over an approved historical period so you can compare its results with what you expected. Check the period, the people included and the quality of the data before you rely on the results.

AI Plan Audit can point out possible problems, but treat it as a second check, not as the approval. A person with the authority to sign off should still review the scheme.

Save the scheme as a draft while the review is open. Publish only after it has been approved. Assigning the scheme to people is a separate step.

Common problems and quick checks

Validation fails: check required fields, condition values, data sources and gaps or overlaps between tiers.
Expected records are missing: review the qualifiers and whether they use AND or OR.
The wrong rule applies: check the evaluation mode, scope, figure used, payout type, calculation method and cap.
Some manager levels are missing: create a separate manager scheme for levels above the direct manager.

Keep the scheme easy to check

Keep the test cases you used for each tier boundary, and remember that publishing a change may affect everyone already assigned to the scheme. In the UK, an employer's written statement of employment particulars must include how much and how often a person will be paid, and employers must tell employees about changes to that statement within one month (GOV.UK, checked 31 Oct 2026). If commission forms part of someone's pay, make sure your scheme documents and contracts say the same thing. This guide is general information, not legal advice.