# Performance incentives

1. Performance incentives
Can someone explain to me, how performance incentives work.

Suppose merchant pays 5% for sales up to \$1000.
-and for total sales amount equal to or greater than \$1000.01 USD increase commission by 15%.

Does that mean you get 5% for the first 1000. and 15% for the rest
or
Do you get 5% for the entire amount with an increase of 10% on the sales over the initial 1000.?
or
Do you get 5% for the entire amount with an increase of 15% on the commission earned above the initial thousand in sales?

If someone can explain it to me as if I was a brain-dead martian, I would really appreciate it and won't take offense if you need to dummy down while explaining it.

2. For sales up to 1,000 you get straight 5% commission. (sales volume x .05= commission).

If all your sales total over \$1,000 you get 5% commission plus an additional 15% of the 5 % added

For example I have a merchant that pays 5 % plus 50% more commission for sales over 1,000. My 2 sales in march totaled 1114.95 I got 55.75 in commission plus and additional 27.87 perf incentive.

In your example I believe if you had 1,001. in sales you would get \$50.05 commission plus 7.50 as perf. incentive (7.50 is 15% of 50.05)

Performance incentives post about a month after they are earned.

3. Good news and bad news.

Good news, when the % goes up, it goes up for all sales, so the new % is usually payable on the whole amount including the bit that got you to the incentive level.

Bad news, the % increase is usually of the commish %, e.g. normally 5% then reach a 20% increase level, the new overall amount goes to 6% (20% of 5% is 1% + the original 5% = 6%).

So as I understand it, with a 20% increase over base at \$1000:

\$999 at 5% = \$49.95
\$1000 at 6% = \$60

4. That makes it a bit clearer

Basically, the performance incentive is calculated on the commission amount earned above the basic thresh hold set by the merchant.

By golly I think I get it now!

I've been getting the p.i. on my cheques but haven't been able to figure out how the amount is derived....and my math would always be a few cents + or -

Thanks for the help

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