Salary vs. Commission: What's the Difference?
Edited by Harlon Moss || By Janet White || Published on November 6, 2023
Salary is a fixed regular payment, typically monthly or bi-weekly, while Commission is a sum paid based on a percentage of sales or performance.
Key Differences
Salary represents a predetermined amount of money an employee receives for their work, often determined annually and divided into regular payments. Commission, on the other hand, is a form of compensation based on an employee's sales, performance, or accomplishment of certain objectives.
Employees receiving a Salary have the advantage of predictability; they earn a set amount irrespective of the work's volume or results. In contrast, those working for Commission can have fluctuating earnings, with their income directly linked to their performance or outcomes achieved.
A Salary is beneficial for jobs where output isn't directly quantifiable, like managerial or administrative roles. Commission is generally used in sales or brokerage roles, where there's a clear link between effort and measurable results, and where incentivizing performance can lead to increased profits.
It's common in some industries for employees to receive both a Salary and Commission, balancing a stable income with performance-based incentives. Such a hybrid compensation can provide security through the salary component, while the commission part serves as motivation to excel.
Salary is often accompanied by benefits such as health insurance, paid leave, and retirement contributions, providing employees with a comprehensive compensation package. While Commission might offer higher earning potential, it may come without the typical employment benefits, making the overall compensation package vary.
ADVERTISEMENT
Comparison Chart
Basis
Fixed amount
Performance-based
Predictability
Stable and predictable
Fluctuates based on results
Common Roles
Managerial, administrative
Sales, brokerage
Benefits
Often includes benefits
Might lack typical benefits
Motivation
Provides security
Incentivizes performance
ADVERTISEMENT
Salary and Commission Definitions
Salary
Prearranged earnings irrespective of hours worked.
Even during slow months, his salary remains unchanged.
Commission
Earnings based on a percentage of sales made.
For every car sold, he earns a 5% commission.
Salary
A set monetary reward for employment.
With a competitive salary, the job offer was appealing.
Commission
Compensation derived from performance metrics.
The more properties she leases, the higher her commission.
Salary
A regular payment for professional services.
His annual salary for the managerial role is $75,000.
Commission
A sum awarded for achieving specific targets.
Reaching his quarterly goals, he secured a hefty commission.
Salary
Fixed compensation for consistent work.
She received a salary, ensuring stable monthly income.
Commission
Monetary incentive to boost sales or outcomes.
To encourage sales, the company offers a generous commission structure.
Salary
Consistent income typically provided monthly or bi-weekly.
The job's benefits and good salary made it an attractive opportunity.
Commission
The act of granting certain powers or the authority to carry out a particular task or duty.
Salary
Fixed compensation for services, paid to a person on a regular basis.
Commission
The authority so granted.
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 matter or task so authorized
Investigation of fraud was their commission.
Salary
To pay on the basis of a period of a week or longer, especially to convert from another form of compensation.
Commission
A document conferring such authorization.
Salary
(obsolete) Saline.
Commission
A public board or administrative body
The Federal Trade Commission investigates false advertising.
Salary
Saline
Commission
Often Commission A ruling council within the Mafia that adjudicates family disputes and regulates family activities.
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
The act of committing or perpetrating
The commission of a crime.
Salary
To pay, or agree to pay, a salary to; to attach salary to; as, to salary a clerk; to salary a position.
Commission
A fee or percentage allowed to a sales representative or an agent for services rendered.
Salary
Something that remunerates;
Wages were paid by check
He wasted his pay on drink
They saved a quarter of all their earnings
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
Payment reflecting individual performance results.
His earnings largely come from commission due to his strong sales record.
FAQs
What's a fixed component of compensation?
Salary provides a fixed, regular payment.
Can an employee receive both Salary and Commission?
Yes, many roles offer a base salary with added commission for performance.
Does a Salary fluctuate month to month?
No, a salary is a consistent amount, while commission can vary.
Is Salary dependent on the number of hours worked?
Typically, a salary is a set amount regardless of hours, unlike hourly wages.
How often is Salary paid?
Typically bi-weekly or monthly, depending on the employer.
What might motivate a salesperson to excel?
A competitive commission structure can incentivize better performance.
Is health insurance typically tied to Salary or Commission?
It's more commonly linked with a salaried position, though it varies by employer.
Does Commission offer job security?
It doesn't guarantee income, making positions relying solely on commission less secure.
How does one earn Commission?
Commission is earned based on sales or specific performance metrics.
Which offers more income stability?
Salary offers a stable, predictable income.
Can Commission surpass Salary in some roles?
Yes, in high-performing sales roles, commission can significantly exceed the base salary.
When is Commission usually awarded?
Often monthly or quarterly, based on achieved results.
Can Salary account for overtime?
Not typically; salaried roles usually have a set pay regardless of hours, unlike hourly positions.
Which is more common in executive roles?
Salary, often combined with bonuses or stock options.
Can Salary be negotiated?
Yes, during the hiring or review process, one can negotiate salary terms.
Is Commission always related to sales?
Often, but it can be linked to other performance indicators too.
How does Commission impact job motivation?
It can boost motivation, as higher performance often results in higher earnings.
Are sales roles primarily commission-based?
Many are, but some offer a base salary with added commission.
Are there caps on Commission earnings?
It depends on the employer; some may have caps, while others offer unlimited earning potential.
Is Salary subject to annual reviews?
Often, employers review and adjust salaries based on performance, inflation, and other factors.
About Author
Written by
Janet WhiteJanet White has been an esteemed writer and blogger for Difference Wiki. Holding a Master's degree in Science and Medical Journalism from the prestigious Boston University, she has consistently demonstrated her expertise and passion for her field. When she's not immersed in her work, Janet relishes her time exercising, delving into a good book, and cherishing moments with friends and family.
Edited by
Harlon MossHarlon is a seasoned quality moderator and accomplished content writer for Difference Wiki. An alumnus of the prestigious University of California, he earned his degree in Computer Science. Leveraging his academic background, Harlon brings a meticulous and informed perspective to his work, ensuring content accuracy and excellence.
