How to Set Up a Tiered Commission

In this article, we'll cover how you can set up a tiered commission for your products, services, packages, and gift vouchers.

The Commissions feature in Pabau allows you to accurately calculate and allocate commissions to staff members based on the items they sell. This flexible feature enables you to set up different types of commission structures and customize how commissions are awarded.

Commissions motivate staff to sell more by directly rewarding them for their sales efforts. For instance, if a staff member sells two items worth $100 each with a 5% commission rate, they earn $10. Customers see only the total amount they paid on their invoices, without any mention of the staff member’s commission.

Pabau supports various types of commissions:

• Fixed Price: A set amount per item sold, such as $0.20 per item.
• Percentage-Based: A fixed percentage of the item's sale price, for example, 1% of the item price.
• Tiered Commission: A varying percentage based on the total amount sold, like 1% for sales between $0-$100 and 1.5% for sales between $100-$1000.

There are two default commission types: Fixed and Tiered. In this guide, we'll focus on setting up tiered commission structures. To learn how to set up fixed-rate commission structures, please refer to this guide.

Step 1: Access the Commissions Feature

To begin, log into your Pabau account and navigate to the left sidebar menu. Click on "Team," then select "Commissions".

Here, you can click on "New Commission Sheet" in the top right corner to create a new sheet. If you wish to edit an existing sheet, click on the three dots icon next to the respective sheet and select "Edit".

Step 2: Navigate to the Commissions and Users Tabs

Upon creating a new commission sheet or editing an existing one, a modal will appear featuring two main tabs: Commissions and Users.

The Commissions tab contains four sub-tabs corresponding to specific item categories: Services, Products, Packages, and Gift Vouchers.

The Users tab allows you to assign staff members to the commission sheet. This topic is addressed in this article.

Step 3: Configure Tiered Commission for an Item Category

To set a tiered commission type for a specific category, follow these steps:

Click on the sub-tab corresponding to the item category you wish to configure, such as Services or Products.

In the "Default commission type" section, select "Tiered".

Under "Rate Type", choose whether the commission will be a percentage or a flat rate per tier.

In the "Sales Period" section, decide how often the commission tiers should reset. Options include:

• Daily
• Weekly (the sales period will restart every Monday)
• Every 2 weeks (the sales period will restart every other Monday)
• Monthly  (the sales period resets on the 1st of each month)
• Quarterly (the sales period resets at the start of each quarter):
  
  Q1: 1st January - 31st March
  Q2: 1st April - 30th June
  Q3: 1st July - 30th September
  Q4: 1st October - 31st December

Tiers: Define the commission amounts for each tier. By default, two tiers will appear. Click "Add Tier" to add more, with each new tier automatically numbered (e.g., Tier 3 following Tier 2).

Example:

• Tier 1: $0 - $1000, award 10%
• Tier 2: $1000 - $2000, award 11%
• Tier 3: $2000 - $3000, award 12%

Next, set up the calculation options and repeat this process for each item category where you want to apply a tiered commission.

How It Works:

• Daily Sales Period: If a staff member sells $100 in one day, they’ll receive a 10% commission on that amount. For sales above $100, they’ll earn 11% on the additional amount. The commission rate resets to 10% the next day.

• Weekly/2-Week Sales Period: If a staff member sells $250 in one week, they’ll receive a 10% commission on the first $100, 11% on the next $100, and 12% on the remaining $50. The commission rate resets every Monday in the case of weekly sales periods, and every other Monday in the case of bi-weekly.

• Monthly Sales Period: Commissions reset at the start of each month, similar to the daily sales period.

  If a staff member reaches the highest tier (e.g., Tier 5), they will remain at that tier until the reset period begins.

Step 4: Repeat the Process for Other Item Categories

After configuring the commission rates, ensure that the Active/Inactive toggle at the top of the item category tab is set to Active. This setting ensures that the commission rules you've defined are applied to the sales transactions.

If you wish to set a tiered commission for other item categories, repeat Step 3 for each additional category. Remember to activate each category by setting the toggle to Active and save your changes accordingly.

Step 5: Activate and Save the Commission Settings

Once everything is set up, click on "Create" (for a new commission sheet) or "Edit" (if modifying an existing sheet) in the top right corner to save your settings.

By following these steps, you can effectively set up tiered commissions in Pabau, allowing you to reward your staff based on their sales performance. This tiered approach not only incentivizes higher sales but also allows for flexibility in how commissions are structured.