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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.
Commission vs. Salary — What's the Difference?

Difference Between Commission and Salary

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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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Author Spotlight

Written by
Tayyaba Rehman
Tayyaba 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.

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