# What is a Commission Plan?

A commission plan rewards employees (often sales) with pay based on performance. SMEs use it to drive revenue.

Source: https://faqtic.co/glossary/commission-plan

## Why it Matters for SMEs

- Motivates sales
- Aligns goals
- Increases revenue

## Example in Practice

Factorial stores commission agreements in employee files.

## Frequently Asked Questions

### Why formalise?

To avoid disputes.

### Flat vs tiered?

Depends on strategy.

### Track payouts?

Yes, in payroll.

---
Canonical HTML: https://faqtic.co/glossary/commission-plan