Create your first comp plan

A comp plan is the set of rules Earnest uses to turn sales into commission. In this guide you create a plan, attach it to a team and give your reps a rate. It takes about 15 minutes. Only admins can create or edit plans.

Before you start

• A plan has no commission % field. Each rep's rate comes from their own position on the People page, not from the plan. The plan decides how the rate is applied: tiers, caps and bonuses.
• A plan pays nobody until it is assigned to a team. People are paid on their team's plan.
• A rep with no rate earns $0. You set the rate in step 9. If you draft payouts for someone without one, Earnest warns "no commission rate" and marks their Payouts row No rate.

A rep's rate is worked out in one of three ways:

OTE means on-target earnings: base salary plus the variable pay a rep earns at 100% of quota.

Create the plan

1. Go to Organization → Plans and click Create New Plan. The Create Compensation Plan wizard opens with five steps: Basics, Settings, Schedule, Ramp and Review.

2. Basics. Enter a Plan Name. Choose the Metric Type:

   • Revenue pays on the money value of deals.
   • Unit Count pays on a count, such as meetings booked.
   • Ratio (per FTE) is for managers only. It measures sales per head of their team. Leave it for later.

   Choose the Payout Frequency. Monthly pays every month. Quarterly pays once per quarter, in the quarter's last month (March, June, September and December).

3. Settings. Leave Base Payout Rate at 1.0. Leave Commission Cap and Commission Floor empty unless you want a maximum or a minimum per period. For a Unit Count plan, enter a Unit Label such as "Meetings Booked".

4. Schedule. The Commission Schedule starts with one tier: From % 0, To % empty, Payout Rate 1.0. That tier pays every sale at the rep's normal rate, which is what most first plans need. Tiers are optional. You can add accelerators later with Add Tier.

5. Ramp. Skip this step unless new hires get a reduced quota. See Comp plan reference when you need one.

6. Review. Check the summary and click Create Plan. Earnest opens the new plan's page.

Assign the plan to a team

7. Go to Organization → Teams.
8. For a new team, click Create Team and pick your plan in Comp Plan. For an existing team, click the team's Edit team icon, choose Single plan, and pick the plan in Comp Plan. If the team already had a plan, pick the month the new plan starts in Effective from.

Give each rep a rate

9. Go to Organization → People, open the row menu for a rep and choose Edit Position. Make sure the rep is on the team from step 8, then fill in the pay fields from the examples below and save.

If you are still adding people, the Invite User dialog has the same OTE, Base Salary and Custom Quota fields. See Add your team.

Worked examples

Example 1: flat 10% of revenue

Earnest saves an OTE of $180,000 ($60,000 + 10% × $1,200,000), and the Pay Rate line reads "10.00% commission rate". A rep who closes $90,000 in a month is paid $9,000.

Keep the team's seasonality at 0.25 for every quarter. Uneven seasonality changes the percentage from quarter to quarter.

Example 2: OTE-based

Comp Mode stays on OTE. The rate is ($200,000 − $100,000) ÷ $1,200,000 = 8.33%. The monthly quota is $100,000. With the single 1.0 tier, a rep who closes $100,000 in a month earns $8,333.33, which is one month of their $100,000 variable pay.

Example 3: per unit

Each meeting pays $50, whatever the rep's OTE or quota. 30 meetings pay $1,500. 50 meetings would be $2,500, so the cap pays $2,000. A flat-rate plan ignores tiers and bonuses, and drops any tiers when you save. Give the rep a quota in meetings (for example 480 a year) so their attainment shows correctly.

Check it worked

• On Organization → Plans, the plan's Active Assignments count is above zero.
• In Edit Position, the Pay Rate line shows the rate you expect, such as "8.33% commission rate".
• On the plan page, click Simulator to see what the plan would cost at different attainment levels.
• Once deals are in, draft a payout: Run your first payout.

Common problems

A rep shows $0. Check these in order:

• The rep has no rate: OTE is empty or equal to base salary, or there's no quota. Drafting warns "no commission rate" for them, and their row shows No rate on Payouts and on People (hover it for the reason). Set OTE above base (or use Comp Mode Commission Rate) and a quota in Edit Position, then regenerate their draft.
• Base Payout Rate or Commission Cap is 0. Both pay nothing. Use 1.0 and leave the cap empty.
• The first tier starts above 0%. The schedule warns that "Reps will earn no commission on revenue below this threshold". Set its From % to 0.

When you publish, Earnest flags any rep with sales and a $0 payout as "$0 with activity".

"A commission rate needs a quota to apply to." Commission Rate mode multiplies your percentage by the quota. Enter a quota, or pick a title that has one.

"OTE above base salary is variable pay, and variable pay needs a quota to measure attainment against." Enter a quota in Edit Position, or give the rep's title an annual quota on the team.

A rep is paid even though their team has no plan. Without a plan they are paid a flat 1× of their rate, with no tiers, cap or floor, and drafting warns "no commission plan assigned". Assign the plan (step 8), then regenerate.

You can't change the frequency or metric type. Once a payout on the plan is published, these are fixed. Use Duplicate on the plan page to make a new plan.

Go deeper

• Comp plan reference
• Modeling and optimizing plans
• Scheduled changes and history
• Glossary