Incentive Calculation

Hi All,

I need to know some information about Sales.

  1. How incentives for Sales is calculated? What is the general % is given to sales people in IT companies in Bangalore?
  2. How it is calculated and when it is paid? Like, monthly, quarterly, half yearly or yearly?
  3. If in a particular month, business is given more than the targeted value, incentives can be paid. But if that person is unable to fulfill his target on quarterly, half yearly or yearly basis, how its being adjusted?
  4. If a sales person is unable to fulfill his target on a regular basis, is there any rule to deduct his salary or deduct the monthly or yearly variable pay?

Hi @PCSPL14052

Sharing what I knew in this area.

Incentives are additional income given to boost employee morale and motivate.

Some things to keep in mind are:

  • Cost Incurred
  • Profit marginalisation
  • and Grades in which this incentives needs to be divided for employees


Grade A - 10% Grade B - 15% etc

Let’s say a salary is 15000 and Grade employee achieves it then 10% of 15,000 will be awarded as incentives.

Incentive cycle is purely based on the product, market etc, to keep it as monthly / Half yearly / Annually etc.,

So give a very basic policy for incentives and start from there as the scenarios arise.

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