
A commission is a payment made to employees or agents when they achieve a defined result, most commonly a sale. Commissions may be calculated as a percentage of the sale value or as a fixed amount based on sales volume. These payments are performance-based and are widely used in sales roles such as retail, automotive, and real estate.
For example, if a salesperson sells a computer for $1,000 and earns a 6% commission, the commission payable is $60.
According to the Australian Taxation Office (ATO), when a commission, bonus, or similar payment relates to work performed in a single pay period (weekly, fortnightly, or monthly), the amount is added to the employee’s other earnings for that period. PAYG withholding is then calculated using the standard tax tables.
Commissions may be paid as an employee’s sole earnings or in addition to their regular wages.
Setting Up Employee Commissions in SapphireOne
Commission processing is built into SapphireOne ERP and Sapphire Web Pack, allowing commissions to be calculated and reported seamlessly.
To set up employee commissions:
- Log in to SapphireOne
- Navigate to Payroll/HR Mode
- Select Administration from the top toolbar
- From the page drop-down menu, choose Salary
- In the Commission section, click the plus (+) icon
- Enter the Sales Rep ID
- Define the margin and commission rate
- Save the record
SapphireOne will automatically calculate and process the commission based on these settings.
Viewing the Sales Commission Report
To view commission results and reports:
- Go to Inventory Mode
- From the top menu, select Sales, then choose Sales People
- Select the relevant Sales Rep ID
- From the page drop-down menu, choose Sales Options
- Click the Print icon in the top toolbar
- Select the required date range
- Choose Open in Preview to view the report
SapphireOne generates a Sales Commission Report showing calculated commissions for the selected period.
How Sales Commissions Work in Practice
Sales employees typically earn a base salary plus commission for meeting or exceeding defined sales targets. A sales commission is additional compensation designed to reward performance above a minimum threshold.
Employers use commissions to:
- Incentivise higher sales performance
- Reward productivity and results
- Align employee goals with business growth
Sales commissions have proven to be an effective compensation model and are widely used across many industries.
Managing and Reporting on Commissions
SapphireOne allows businesses to manage commissions flexibly and at scale. You can:
- Configure commission structures
- Create custom fields and calculation formulas
- Build dashboards for performance tracking
- Generate detailed commission and sales reports
This ensures commissions are calculated accurately, reported clearly, and aligned with your broader payroll and accounting processes.
You can track your sales by employee, sales rep, etc. under Inventory module. For more information regarding improvements and features within the latest release of SapphireOne ERP Business Accounting Application please contact our office on +61 (02) 8362 4500, request a demo or SapphireOne on email sales @sapphireone.com.
