rendered or products sold It is a common way to reward sales people. Sales agents and brokers are generally paid commissions as incentives for increasing the firms sales. Some of these sales agents or brokers are paid solely through commission or what is termed as plain commission.
Plain commission is computed by
multiplying the total sales of an agent or broker by the rate of the commission. Agents who are at the same time are employees of the firm receive basic salary plus the amount of the commission.
Assuming that Carmen Yambao receives a
basic salary of P 10,000 per month, her gross earnings will be: Gross Earnings = Basic Salary + Commission = Basic Salary + (Sales x Rate of Commission) = P10,000 + (P1,035,000x2%) = P10,000 + P20,907 = P30,907 Some sales employees receive commission on a per quota basis, that is, they will only be awarded with commission provided that they have reached sales above a certain figure. As their sales reached a certain range above the minimum required figure, the commission rate also increases. Eugene Tito is a sales representative earning a basic salary of 18,000 a month plus 3% commission on his sales exceeding his quota of 15,000. Assume he made a total sales of 36,000 for the current month. Find his gross earnings.
Gross Earnings = Basic Salary + Commission
= 18,000 + 3% (Sales Quota) = 18,000 + 3% (36,000 15,000) = 18,000 + 3% (21,000) = 18,000 + 630 = 18,630 Commission on sales in installment basis is paid based on collection. Marketing and/or product managers are generally paid overrides on the sales of the people under them.
The gross earnings will be their basic pay
plus commission on their own sales plus override. In certain cases, they were also given allowances. M. Coronilia is a product manager with five sales representatives under him. The company gives him an annual salary of 126,000; commission of 5% on his own sales; and an override of 12% on his mens sales. Find his gross earnings for the month if his total sales is 365,500 with his men able to sell a total of 1,548,263 for the month.
Commission = 5% his own sales
= 5% 365,500 = 18,275 1 Override = % his mens sales 2 = 0.005 1,548,263 = 7,741.32 126,000 Basic salary = = = 10,500 12 12 Gross earnings = 36,516.32 In certain cases, salespersons are also given transportation and/or representation allowance that is also being added to the gross earnings of a salesperson. Emmanuel earns a basic salary of 12,500 per month. He earns a 3% commission on his own sales and a 1% override on the sales of his men. In addition, he is granted a transportation/ representation allowance of 1,000 per month. For the current month, his men made a total sales of 250,000. He made a total sales of 140,000. His gross earnings would be: