Which term describes a form of compensation based on a percentage of sales?

Which term describes a form of compensation based on a percentage of sales?

• A. Bonus
• B. Subordinates
• C. Commission
• D. Delegation

Answer: (C)

Pay that depends on the value of sales is called commission. This form of pay ties earnings directly to how much a salesperson sells, using a percentage of each sale to provide motivation to close more deals. It can be paid on top of a base salary or as the sole income in a commission-based role, and the percentage can vary by product or sales target. This differs from a bonus, which is typically a one-off reward for hitting targets rather than a continuous share of every sale. The other terms refer to people or management actions, not a pay arrangement linked to sales.

Pay that depends on the value of sales is called commission. This form of pay ties earnings directly to how much a salesperson sells, using a percentage of each sale to provide motivation to close more deals. It can be paid on top of a base salary or as the sole income in a commission-based role, and the percentage can vary by product or sales target. This differs from a bonus, which is typically a one-off reward for hitting targets rather than a continuous share of every sale. The other terms refer to people or management actions, not a pay arrangement linked to sales.