# What is Variable Pay?

Variable pay is compensation based on performance, such as bonuses or commissions. SMEs use it to motivate and reward staff.

Source: https://faqtic.co/glossary/variable-pay

## Why it Matters for SMEs

- Drives performance
- Aligns incentives
- Rewards results

## Example in Practice

Factorial records bonus schemes in payroll data.

## Frequently Asked Questions

### Why use variable pay?

To reward outcomes.

### Risks?

Can harm teamwork if poorly designed.

### Track in tools?

Yes, via pay fields.

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Canonical HTML: https://faqtic.co/glossary/variable-pay