New Commission Plan Question

10% or 16%

  • 10% paid in January 2016

    Votes: 0 0.0%
  • 16% paid in January 2016

    Votes: 0 0.0%

  • Total voters
    0
  • Poll closed .

xphaktor

New member
Joined
Feb 9, 2016
Messages
1
Having trouble understanding if my co-workers and I are getting a fair deal in our NEW comp plan. Would appreciate any help here and an explanation either way.

Under the old comp plan

- Commissions are paid 10% per month on net margin paid the previous month (exmp: 50k in net margin paid by customers in January 2015 = 5K in commissions paid in February)
- The following year, in March of 2016, a 11% Bonus is paid on all "collected net margin" for the previous year (January 1 - December 31st of 2015) (exmp: 600K "collected net margin" in 2015 = 66K Bonus paid in March of 2016)

Total compensation for what was paid in 2015 (Assumes all 12 months were equal to the above example = 126K


Under the new comp plan

- Commissions are paid 16% per month on net margin paid the previous month (exmp: 50K in net margin paid by customers in January = 8K in commissions paid in February)
- The following year, in March of 2017, a 5% Bonus is paid on all "collected net margin" for the previous year (January 1 - December 31st of 2016) (exmp: 600K "collected net margin" in 2016 = 30K Bonus paid in March of 2017)


Question: Employer is claiming that commission for January of 2016 should only be 10% and not the new 16% as any "collected net margin" in December was under the old comp plan of 10%. Then 16% monthly commissions will be paid starting in February of 2016. The question is, should the employer be paying 16% commission rate in January even though what is paid in January commissions was collected in 2015 under the old comp plan or is 10% the correct commission rate for January? If 16% is not paid in January, is the additional 6% of commissions paid to the employees ever?

Any help here or explanations either way is much appreciated.
 
Having trouble understanding if my co-workers and I are getting a fair deal in our NEW comp plan. Would appreciate any help here and an explanation either way.

Under the old comp plan

- Commissions are paid 10% per month on net margin paid the previous month (exmp: 50k in net margin paid by customers in January 2015 = 5K in commissions paid in February)
- The following year, in March of 2016, a 11% Bonus is paid on all "collected net margin" for the previous year (January 1 - December 31st of 2015) (exmp: 600K "collected net margin" in 2015 = 66K Bonus paid in March of 2016)

Total compensation for what was paid in 2015 (Assumes all 12 months were equal to the above example = 126K


Under the new comp plan

- Commissions are paid 16% per month on net margin paid the previous month (exmp: 50K in net margin paid by customers in January = 8K in commissions paid in February)
- The following year, in March of 2017, a 5% Bonus is paid on all "collected net margin" for the previous year (January 1 - December 31st of 2016) (exmp: 600K "collected net margin" in 2016 = 30K Bonus paid in March of 2017)


Question: Employer is claiming that commission for January of 2016 should only be 10% and not the new 16% as any "collected net margin" in December was under the old comp plan of 10%. Then 16% monthly commissions will be paid starting in February of 2016. The question is, should the employer be paying 16% commission rate in January even though what is paid in January commissions was collected in 2015 under the old comp plan or is 10% the correct commission rate for January? If 16% is not paid in January, is the additional 6% of commissions paid to the employees ever?

Any help here or explanations either way is much appreciated.

First, notice that the the commissions don't change, you still get 21% aggregate in the old and new plan. So, in a sense it doesn't make any difference. If you get the new 16% in January for December's net margin then, in March, you would get 5% on December for last year for the yearly net margin, i.e. 11% for Jan 1 to Nov 30 and 5% for Dec 1 to Dec 31. You can't have your cake and eat it too. That is you can't get both the new monthly and the old yearly for the same month.
 
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