About Progressive or Non-Progressive Calculation Sales
Select the Progressive Calculation check box if you want the system to use progressive calculation to calculate the total commission on sales. If you want to use the non-progressive method, clear the check box.
In both types of calculations, the rate varies according to the total sales during the pay period.
In progressive calculation, one commission rate is paid for sales up to a set threshold. A second rate is paid on any sales above the threshold during the same pay period.
For example, suppose you set up a sales commission table with a commission percentage of 10% for sales between $0.00 and $5,000.00 and a commission percentage of 15% for sales between $5,000.01 and $7,500.00.
If an employee’s sales were $6,800.00 during a pay period, the system would calculate a total commission of $770.00, as follows:
- $500.00 of commission for the first $5,000.00 worth of sales (10% x $5,000.00)
- $270.00 of commission for the next $1,800.00 worth of sales (15% x $1,800.00)
In non-progressive calculation, the same commission rate is paid for all the sales, but that rate is determined by the total amount of sales during a pay period.
For example, suppose you set up the same sales commission table as described earlier in the progressive calculation example.
If an employee’s sales were $6,800.00 during a pay period, the system would calculate a total of $1,020.00 commission (15% x $6,800.00).
Timecard Entries
Note that payroll handles each pay period entry on the timecard separately. For example, suppose you set up the same sales commission table as described earlier in the progressive calculation example.
For progressive calculation:
- If the employee reports $6,800.00 of sales as one timecard entry, the system calculates a commission of $770.00, as described earlier in the progressive calculation example.
- If the employee reports the $6,800.00 as two timecard entries, of $3,400 each, the system calculates a commission of $680.00 — that is, (10% x $3,400) + (10% x $3,400).
For non-progressive calculation:
- If the employee reports $6,800 of sales as one timecard entry, the system calculates a commission of $1,020.00, as described earlier in the non-progressive calculation example.
- If the employee reports the $6,800 as two timecard entries of $3,400 each, the system would calculate a commission of $680.00 — that is, (10% x $3,400) + (10% x $3,400).