Creating Commission Structures

Create complex commission structures that your organization can assign to salespeople at the client level with the Commission Plan Maintenance form.

You can use a commission plan as a template. Organizations that use commissions often have a standard commission program for either all or a subset of its salespeople. Assigning a commission plan code to a salesperson rather than entering individual commission structures saves effort.

Note: After creating a commission plan at the client level, if you make updates to that plan and click Save, the system cannot apply those updates. For example, if you create commission plan A and apply it to client 123, then update commission plan A and save the updates the system displays an error message, "This plan is assigned to a client and changes cannot be made. Either unassign from all clients to make changes or create a new plan." Click OK to continue.

In addition, existing commission plans already in use at the client level cannot be deleted. For example, if you click the Delete button for a client-level plan and then select Yes an error message displays, "This plan is in use and cannot be deleted." Click OK to continue.

To create a commission structure, do the following:

Click Back Office.

From Operations|Change, select Commission Plan Maintenance.

Complete these fields as required.

Field Name

Description

Commission Plan ID

Select a plan ID that represents the commission plan.

Commission Plan Name

Enter a name that describes the plan.

Commission Plan Active

Select if this commission plan is in use. If you deselect this option, it does not affect currently assigned plans, but it warns users when they review commissions.

Based On

Select a value on which to base the commission line.

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Gross Wages: Total gross wages of the client payroll invoice.

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Admin Fees: Total amount of administrative fees on the client payroll invoice.

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Benefit Commission Type: Benefits-based commission for a specific benefit type. You must enter the benefit type code in the Based On Item field.

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Benefit Commission Percentage: Percentage based on the benefit list. You must enter the specific group benefit plan ID in the Based On Item field.

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Workers Compensation: Total amount of workers’ compensation billed to the client for the payroll period.

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Workers Compensation Profit: Checks bill code 005 and computes the profit, and also checks for information entered on losses.

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Average Number Lives: Average number of active employees during the commission cycle.

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Gross Profit: Sales items minus the direct cost items. The value is shown on the Profitability Report in the backend system.

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Tax Profit (001/002/003/004): Sales of tax-based items (FUTA, SUTA, and FICA, as associated with the listed tax bill classes) minus the cost for those tax items. Tax profit is rarely used for commissions because when not passing shelter credits it can often show a loss for the month.

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Percent of Bill Code: Fixed percentage for the amount charged on a specific bill code. Enter that in the Based On Item field.

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Profits to Admin [Enter Bill Code in Based On]: The system uses the specified Bill Code and then subtracts the cost associated with that Bill Code. That amount (profit or loss) is used in the percent computation. For example, if you choose Bill Code 004 (SUTA) and specify 5% of profits, and there was $1000 in sales and $960 in costs, the payout would be $2.00 ($40.00 x 0.05).

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Fixed Per Paid EE [PayFrequency in Based On if needed]: Fixed amount per paid employee. Specify a pay frequency if appropriate (see Based On Item description).

Based On Item

Enter the Based On Item that works in conjunction with the Based On value to calculate the commission.

If the line is based on benefit type, enter the specific benefit code associated with the plan(s). The system uses benefit plans with this code in the calculation for this commission. (See Assigning a Benefit Commission Code.)

If the line is based on gross wages or admin fees, you can also do computations based on the workers’ compensation code on the payroll vouchers. For example:

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TX.8810 would specify that the system compute a rate based on TX.8810 wages (for gross wages) or administrative fees (for admin fees).

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*.8810 would be for all states using 8810 as a code.

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*.* would be for all workers’ compensation codes.

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If all three were entered in that order, then the system would put all Texas 8810 in the first bucket, all 8810 except Texas in the second bucket, and all codes except 8810 in the third bucket.

Note: The order must be correct. If *.* is the first code, then there would be no other data to allocate to other buckets because all WorkersCode would match this bucket and be assigned.

For Fixed Per Paid EE, this field can be a pay frequency (W, B, S, or M) to allow different rates for different pay frequencies since this payment is per regular invoice.

Employee count - low/Employee count - high

Enter the Employee count - low and Employee count - high end values used to calculate this type of commission/rate. For example, if these fields define a range of 0–100 employees and the client has 125 employees, the system does not calculate this commission. The employee count fields are particularly important if the commission is based on the average number of active employees, since the count is used in the calculation itself.

Flat Or Percent

Indicate whether the commission calculation is a Flat or Percent rate. This works in conjunction with the Commission Rate field.

Commission Rate

Enter the Commission Rate, which relates to the Flat or Percent field value. If you enter 15.00 in this field, for example, the commission rate is $15.00 for a flat calculation rate or 15% for a percent calculation rate.

Commission Group

Enter the Commission Group to group the commission line with other commission computations with the same number. Number the groups sequentially (1, 2, 3, and so on). Groups allow the system to test among groups to select either the highest or lowest amount, based on the Commission Group Highest or Lowest field.

Commission Group Highest Or Lowest

If this is a grouped plan, indicate the amount to use:

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Select Highest to use the highest result of the grouped commission computation lines.

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Select Lowest to use the lowest result of the grouped commission computation lines.

See Grouping Commissions for information on how the system uses commission groups.

Click Save.