Commission is the variable pay component of a sales rep's compensation, tied directly to closed revenue or other defined sales outcomes. Commission is calculated by multiplying the deal's ARR or ACV by a commission rate, which typically ranges from 5–12% for AEs depending on segment, product margin, and company stage. Commission structures can be simple (flat rate on all bookings) or complex (tiered by deal size, product type, or attainment level with accelerators).