Dear SaaStr: How Much Do B2B Sales People Make in Commission?
SaaS sales compensation is evolving, with a persistent 50/50 base-to-bonus split but shifting quotas and commission structures. The trend favors a "hunter-farmer" model where Account Executives manage the entire customer lifecycle, impacting variable compensation.
The compensation landscape for SaaS sales professionals is undergoing significant shifts, though some fundamentals remain constant. A prevalent structure maintains a 50/50 split between base salary and variable compensation. However, quotas have increased, and the distribution of earnings is evolving to reflect new market dynamics.
Sales representatives typically generate 3 to 5 times their On-Target Earnings (OTE) depending on deal size, with enterprise deals yielding higher multiples. While well-funded startups might temporarily offer over 20% of first-year Annual Contract Value (ACV) in compensation, this becomes unsustainable for a profitable business, especially with high churn rates.
ICONIQ Growth's 2026 data indicates a return to the "hunter-farmer" sales model, where Account Executives (AEs) are responsible for both acquiring new customers and nurturing existing ones throughout their lifecycle. This integrated approach, particularly effective for companies under $1 billion ARR, is driving up Net Dollar Retention (NDR) and Net Revenue Retention (NRR) compensation components.
This shift in responsibilities explains the corresponding changes in variable compensation. As AEs take on full customer lifecycle ownership, their variable pay needs to reflect this broader remit. This has led to notable increases in NDR and NRR compensation percentages year over year.
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