Commission tiers, accelerators and caps
The commission rate on the front page of your plan is the least important number in it. Thresholds, tier structure, accelerators and caps decide what you actually take home — and one ambiguous sentence about tiers can be worth $10,000.
Reviewed 20 August 2026 · gross estimates, not payroll or tax advice
Tiers, accelerators and caps in one paragraph each
Short answer
The headline commission rate tells you very little. Tiers, accelerators and caps decide most of what you actually earn. A tier changes the rate at a revenue boundary. An accelerator raises the rate once you pass quota. A cap stops the plan paying beyond a ceiling. A plan with a 5% rate and a 2× accelerator can pay far more than one with an 8% rate and a cap at 120%.
How tiers actually work — and the trap
There are two ways to run tiers, and plan documents are frequently vague about which one applies. The difference is worth thousands.
| Marginal (progressive) | Retroactive (cliff) | |
|---|---|---|
| How it works | Each slice of revenue pays at its own tier rate | Reaching a tier re-rates all revenue at the higher rate |
| $600k sold, tiers 4% to $500k then 6% | (500k×4%) + (100k×6%) = $26,000 | 600k × 6% = $36,000 |
| Behaviour it creates | Steady effort | Frantic sandbagging around the boundary |
| How common | The large majority of plans | Rare, and usually a deliberate stretch device |
Accelerators: where the money is
An accelerator multiplies the commission rate on attainment above 100%. It exists because the marginal deal above quota is disproportionately valuable to the company, and because without it there is no reason to keep selling in December.
Take a $500,000 quota, $50,000 target commission (10% of quota), and a 2× accelerator above target.
Read the second half of that chart carefully: going from 100% to 150% adds $50,000, exactly what the first 100% paid. That asymmetry is the entire economic argument for taking a high-variable sales job, and it disappears completely the moment a cap is introduced.
Caps, and how to spot one that is not called a cap
A cap limits total commission regardless of results. Explicit caps are easy to find. The problem is the implicit ones.
None of these are necessarily bad faith — companies genuinely do need protection against a single freak deal paying someone more than the CEO. But you should know they are there before you plan your year around the uncapped upside.
How they stack, in order
The order matters. A cap applied before an accelerator produces a different (and lower) number than a cap applied after. Nearly all plans apply the cap last, but clawbacks are the genuinely contested one: whether a chargeback is deducted before or after the cap can change the payout when you are at the ceiling.
Worked example. Quota $400,000, achieved $520,000 (130%). Base rate 8%, accelerator 1.75× above quota, cap $60,000, one $20,000 chargeback.
400,000 × 8% = $32,000 to quota · 120,000 × 8% × 1.75 = $16,800 accelerated · total $48,800 · less 8% of the $20,000 chargeback ($1,600) leaves $47,200, then rounded to plan terms $46,800, comfortably under the $60,000 cap. Educational gross estimate only.
Model your own plan in the commission calculator or the accelerator calculator.
Six questions to ask before you sign
Frequently asked questions
What is a commission accelerator?
A multiplier applied to the commission rate on attainment above 100% of quota, typically between 1.5 and 3 times the base rate. It exists to keep reps selling after they have hit target, and it is where most of the upside in a sales plan lives.
What is the difference between marginal and retroactive tiers?
With marginal tiers, each band of revenue pays at its own rate. With retroactive tiers, reaching a higher band re-rates all revenue at that higher rate. On $600,000 of sales with tiers of 4% to $500,000 then 6%, marginal pays $26,000 and retroactive pays $36,000.
Are commission caps legal?
Generally yes. Caps are a normal contractual term in most jurisdictions, provided they are disclosed in the plan document you agreed to. What is usually contestable is applying a cap retroactively, or introducing one mid-period without notice. Employment law varies, so take local advice if it matters.
What is a commission threshold?
The minimum attainment at which commission starts being earned, commonly 60 to 80 percent of quota. Below it the payout is zero, not reduced. A high threshold combined with a low base salary is the riskiest plan structure there is.
What is a clawback?
A contractual right for the employer to recover commission already paid, usually triggered when a customer cancels, refunds or fails to pay within a set window. Ask how long the window is and whether it still applies after you leave.
How do accelerators and caps interact?
The accelerator raises earnings above target and the cap stops them at a ceiling, applied last. A plan with a strong accelerator and a cap at 150% of target behaves like an uncapped plan up to that point and like a flat salary beyond it.
Related tools and guides
Written and reviewed by the BonusPayCalc editorial team. Every formula on this site is shown on the page that uses it, so you can check it against your own plan document. Figures are gross planning estimates and not payroll, tax, legal or HR advice — see methodology.