Commission vs. Salary — What's the Difference?
By Tayyaba Rehman — Updated on September 14, 2023
Commission is payment based on a percentage of sales or revenue generated, while a salary is a fixed, regular payment often calculated on an annual basis.
Difference Between Commission and Salary
Table of Contents
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Key Differences
Commission is a form of compensation that's typically tied to performance metrics, usually sales or revenue. Salary, in contrast, is a fixed sum paid to an employee, often calculated on an annual basis and distributed in equal increments over time.
Commission creates an incentive structure that encourages employees to maximize sales or performance, as their earnings are directly proportional to their results. Salary provides a stable, predictable income but may not offer the same level of motivation for exceeding performance targets.
In jobs with commission-based pay, there is often more variability in income, reflecting the ups and downs of sales or deals closed. Salary-based positions offer financial security and consistency, making it easier for employees to plan their financial lives.
A commission-based job may come with a lower base salary or even no base salary at all, relying solely on earnings from sales. Salary-based jobs usually come with a benefits package, including healthcare, retirement contributions, and paid time off, which may not be as comprehensive in commission-based roles.
Comparison Chart
Basis of Pay
Performance metrics (e.g., sales, revenue)
Fixed annual or monthly rate
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Variability
High, dependent on performance
Low, consistent
Incentive
Encourages maximized performance
Stability, may lack performance push
Benefits
May not include comprehensive benefits
Often includes benefits package
Financial Planning
Difficult due to income variability
Easier due to income consistency
Compare with Definitions
Commission
Commission is income based on meeting or exceeding certain metrics.
Her commission doubled when she hit her quarterly targets.
Salary
Salary is often calculated on an annual or monthly basis.
His monthly salary was $4,000.
Commission
An instruction, command, or role given to a person or group
One of his first commissions was to redesign the Great Exhibition building
He received a commission to act as an informer
Salary
Salary is a fixed, regular payment.
She received a salary of $50,000 per year.
Commission
A group of people entrusted by a government or other official body with authority to do something
A commission was appointed to investigate allegations of police violence
Salary
Salary is a pre-determined sum agreed upon contractually.
His contract outlined his salary and benefits.
Commission
A sum, typically a set percentage of the value involved, paid to an agent in a commercial transaction
He sold cosmetics on commission
Foreign banks may charge a commission
Salary
Salary often includes a benefits package.
His salary package included healthcare and retirement contributions.
Commission
A warrant conferring the rank of officer in an army, navy, or air force
He has resigned his commission
She intended to apply for a commission in the army
Salary
A salary is a form of periodic payment from an employer to an employee, which may be specified in an employment contract. It is contrasted with piece wages, where each job, hour or other unit is paid separately, rather than on a periodic basis.
Commission
The action of committing a crime or offence
The commission of an arrestable offence
The errors are of omission rather than commission
Salary
A fixed regular payment, typically paid on a monthly basis but often expressed as an annual sum, made by an employer to an employee, especially a professional or white-collar worker
He received a salary of £24,000
A 15 per cent salary increase
Commission
Order or authorize the production of (something)
The portrait was commissioned by his widow in 1792
Salary
Pay a salary to
The Chinese system—salary the doctor and stop his pay when you get ill
Commission
Bring (something newly produced) into working condition
The aircraft carrier was commissioned in 1945
We had a few hiccups getting the heating equipment commissioned
Salary
Fixed compensation for services, paid to a person on a regular basis.
Commission
Appoint (someone) to the rank of officer in an army, navy, or air force
He was commissioned into the Royal Fusiliers
Salary
A fixed amount of money paid to a worker, usually calculated on a monthly or annual basis, not hourly, as wages. Implies a degree of professionalism and/or autonomy.
Commission
The act of granting certain powers or the authority to carry out a particular task or duty.
Salary
To pay on the basis of a period of a week or longer, especially to convert from another form of compensation.
Commission
The authority so granted.
Salary
(obsolete) Saline.
Commission
The matter or task so authorized
Investigation of fraud was their commission.
Salary
Saline
Commission
A document conferring such authorization.
Salary
The recompense or consideration paid, or stipulated to be paid, to a person at regular intervals for services; fixed wages, as by the year, quarter, or month; stipend; hire.
This is hire and salary, not revenge.
Commission
A public board or administrative body
The Federal Trade Commission investigates false advertising.
Salary
To pay, or agree to pay, a salary to; to attach salary to; as, to salary a clerk; to salary a position.
Commission
Often Commission A ruling council within the Mafia that adjudicates family disputes and regulates family activities.
Salary
Something that remunerates;
Wages were paid by check
He wasted his pay on drink
They saved a quarter of all their earnings
Commission
The act of committing or perpetrating
The commission of a crime.
Salary
Salary provides a stable income.
Her salary made it easier to budget and plan.
Commission
A fee or percentage allowed to a sales representative or an agent for services rendered.
Commission
An official document issued by a government, conferring on the recipient the rank of a commissioned officer in the armed forces.
Commission
The rank and powers so conferred.
Commission
To grant a military commission to.
Commission
To grant authority for (something to be made or done); place an order for
Commission a new symphony for the festival.
Commission
To authorize or engage (someone to do something)
Commission an architect to design a building.
Commission
To put (a ship) into active service.
Commission
A sending or mission (to do or accomplish something).
Commission
An official charge or authority to do something, often used of military officers.
David received his commission after graduating from West Point.
Commission
The thing to be done as agent for another.
I have three commissions for the city.
Commission
A body or group of people, officially tasked with carrying out a particular function.
The European Commission
The Electoral Commission
The Federal Communications Commission
The company's sexual harassment commission made sure that every employee completed the on-line course.
Commission
A fee charged by an agent or broker for carrying out a transaction.
A reseller's commission
The real-estate broker charged a four percent commission for their knowledge on bidding for commercial properties; for their intellectual perspective on making a formal offer and the strategy to obtain a mutually satisfying deal with the seller in favour of the buyer.
Commission
The act of committing (e.g. a crime or error).
The commission, preparation or instigation of an act of terrorism
Commission
(transitive) To send or officially charge someone or some group to do something.
James Bond was commissioned with recovering the secret documents.
Commission
(transitive) To place an order for (often a piece of art).
He commissioned a replica of the Mona Lisa for his living room, but the painter gave up after six months.
Commission
To put into active service.
The aircraft carrier was commissioned in 1944, during WWII.
Commission
The act of committing, doing, or performing; the act of perpetrating.
Every commission of sin introduces into the soul a certain degree of hardness.
Commission
The act of intrusting; a charge; instructions as to how a trust shall be executed.
Commission
The duty or employment intrusted to any person or persons; a trust; a charge.
Commission
A formal written warrant or authority, granting certain powers or privileges and authorizing or commanding the performance of certain duties.
Let him see our commission.
Commission
A certificate conferring military or naval rank and authority; as, a colonel's commission.
Commission
A company of persons joined in the performance of some duty or the execution of some trust; as, the interstate commerce commission.
A commission was at once appointed to examine into the matter.
Commission
The acting under authority of, or on account of, another.
Commission
To give a commission to; to furnish with a commission; to empower or authorize; as, to commission persons to perform certain acts; to commission an officer.
Commission
To send out with a charge or commission.
A chosen bandHe first commissions to the Latian land.
Commission
A special group delegated to consider some matter;
A committee is a group that keeps minutes and loses hours
Commission
A fee for services rendered based on a percentage of an amount received or collected or agreed to be paid (as distinguished from a salary);
He works on commission
Commission
The act of granting authority to undertake certain functions
Commission
The state of being in good working order and ready for operation;
Put the ships into commission
The motor was out of commission
Commission
A group of representatives or delegates
Commission
A formal statement of a command or injunction to do something;
The judge's charge to the jury
Commission
An official document issued by a government and conferring on the recipient the rank of an officer in the armed forces
Commission
The act of committing a crime
Commission
A special assignment that is given to a person or group;
A confidential mission to London
His charge was deliver a message
Commission
Put into commission; equip for service; of ships
Commission
Place an order for
Commission
Charge with a task
Commission
Commission is a percentage of sales revenue.
He earned a 10% commission on every car sold.
Commission
Commission is a fluctuating form of earnings.
His commission varied from month to month.
Commission
Commission acts as a financial incentive.
The commission structure motivated her to close more deals.
Commission
Commission is compensation outside of a fixed salary.
In addition to his base salary, he earned a commission.
Common Curiosities
What is Commission?
Earnings based on a percentage of sales or performance metrics.
Is Commission variable?
Yes, it fluctuates based on performance.
What motivates Commission-based work?
Financial incentives tied to performance.
Is Commission suitable for aggressive sales roles?
Often, yes, as it incentivizes high performance.
What is Salary?
A fixed, regular payment often calculated on an annual basis.
Is Salary consistent?
Yes, it remains stable over the payment period.
Do Salary-based jobs offer benefits?
Typically, including healthcare, retirement, etc.
How is Salary usually paid?
In consistent increments (weekly, bi-weekly, monthly).
Is financial planning easier with Salary?
Generally, yes, due to income consistency.
Does Salary include incentives?
Generally, it's a fixed amount, but bonuses may be added.
Do Commission-based jobs offer benefits?
Often less comprehensive than salary-based jobs.
How is Commission usually paid?
As a percentage of sales or performance.
Is Commission better for high earners?
Potentially, for those who exceed performance metrics.
Is Salary suited for long-term employment?
Yes, it offers financial stability.
Can a job offer both Commission and Salary?
Yes, some jobs have a base salary plus commission.
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Written by
Tayyaba RehmanTayyaba Rehman is a distinguished writer, currently serving as a primary contributor to askdifference.com. As a researcher in semantics and etymology, Tayyaba's passion for the complexity of languages and their distinctions has found a perfect home on the platform. Tayyaba delves into the intricacies of language, distinguishing between commonly confused words and phrases, thereby providing clarity for readers worldwide.
