The founder Slack message I see most often: "What base-to-commission split should we use?"

The honest answer: It depends on your stage, runway, and sales cycle length. But the wrong split can tank your rep retention or drain your runway in 6 months.

Let me cut through the noise with the three most common structures—and when to use each one.

The Three Core Commission Structures for Early-Stage Startups

Why This Works

Commission structure is the single biggest lever on rep behavior. Get it right and your team self-manages toward the outcomes you need. Get it wrong and you'll spend months debugging behavior that's actually a comp problem in disguise.

1. The 70/30 Split (70% Base, 30% Commission)

Best for: Pre-PMF, bootstrapped, or <$1M ARR companies

At this stage, your product isn't selling itself yet. Your reps are half-salespeople, half-customer researchers. They're learning what messaging works, discovering your ICP, and validating your pricing.

Example: $50K base salary + $21.4K target commission = $71.4K OTE

Why this works:

The catch: If you're still here after 18 months of growth, 70/30 signals you're not scaling. It's a ramp plan, not a scale plan.

2. The 60/40 Split (60% Base, 40% Commission)

Best for: $1M–$5M ARR, product-market fit proven, repeatable sales process

This is the Goldilocks zone. You've proven demand. Your sales process has predictable steps. New reps can ramp in 60–90 days and hit quota by month 4–5.

Example: $60K base + $40K target commission = $100K OTE

Why this works:

The catch: Requires discipline. If your reps hit 70% quota on average, you've set quotas wrong or your process is broken.

3. The 50/50 Split (50% Base, 50% Commission)

Best for: $5M+ ARR, mature sales org, sales cycles <60 days

Only go here if your quota is genuinely achievable by 70%+ of reps and your sales cycle is short enough that reps see commission within 30–45 days.

Example: $50K base + $50K target commission = $100K OTE

The brutal truth: If your reps aren't hitting 80%+ of quota, 50/50 will triple your churn. You'll hire aggressive salespeople, they'll burn out, and you'll explain their departure as "they weren't coachable"—but really, your commission math was off.

Try it yourself

Want to see what a 70/30 or 60/40 plan looks like for your stage and ACV? Generate a benchmarked plan instantly.

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The Critical Rule: Commission Must Be Achievable

I've seen founders make this mistake: set OTE at $100K with a 50/50 split, then set quota at $2M when the market only supports $300K per month.

Result: Rep makes $70K–$80K, gets angry, leaves. Founder blames rep. But it was a quota problem, not a rep problem.

The formula:

Achievable Quota = 3x to 5x the rep's fully burdened cost (OTE)

For a $100K OTE rep:

When to Shift from One Split to Another

You're ready to move from 70/30 → 60/40 when:

You're ready to move from 60/40 → 50/50 when:

The Acceleration Multiplier

Once you're at 60/40 or 50/50, add accelerators:

Simple accelerator:

Why: Accelerators reward consistency without breaking the bank. We cover this in detail in our guide on commission accelerators and SPIFs.

Regional Adjustments

If you hire in multiple regions, factor in cost of living:

RegionTypical OTE Adjustment
San Francisco, NYC+20–30%
Tech hubs (Austin, Seattle, Boston)+10–15%
Mid-tier citiesBaseline
Remote / Midwest–10–15%

The Bottom Line

StageRecommended SplitWhy
Pre-PMF, <$1M ARR70/30Safety net for reps, runway protection for you
$1M–$5M ARR60/40Proven process, motivated hunters, predictable cost
$5M+ ARR50/50Attract senior talent, mature org, risk-aware hiring

Start conservative. If you're in doubt, go 70/30. You can always shift to 60/40 (your reps will celebrate). But shifting down destroys trust.

Now that you have your commission split figured out, the next step is setting the right quota for your stage.