Sales Commission Benchmarks 2026: How to Compete for Talent Without Overpaying
The Finance Leader's Dilemma:
If you pay too little, you recruit B-players and lose revenue. If you pay too much, you destroy your CAC efficiency. Benchmarking isn't just HR work; it's financial strategy.
High-performing sales reps are mercenaries. They know exactly what their market value is. If your On-Target Earnings (OTE) is $20k below the market median, your recruiters are fighting a losing battle.
But "market rate" is a moving target. Inflation, remote work, and the shift to profitability over growth have changed the benchmarks for 2026.
Here is how to audit your current compensation plan against the market to ensure you are competitive—but fiscally responsible.
1. Benchmarking OTE (The Sticker Price)
OTE (Base + Variable) is the first number a candidate looks at.
2026 Tech/SaaS Benchmarks (Mid-Market):
- SDR/BDR: $75k - $95k OTE
- SMB Account Executive: $110k - $150k OTE
- Mid-Market Account Executive: $160k - $230k OTE
- Enterprise Account Executive: $260k - $360k+ OTE
Note: These are ranges for major hubs. Adjust down 10-15% for Tier 2 markets, but beware: Remote work has flattened these curves.
The CFO Tip: Don't try to save money on OTE. Save money on Headcount. It is better to have 5 reps at market rate who hit quota than 8 underpaid reps who miss it.
2. Benchmarking Pay Mix (Risk vs. Reward)
Pay Mix is the ratio of Base Salary to Variable Commission.
- Standard Hunter Role (AE): 50/50 Split. (e.g., $80k Base / $80k Variable). This is the industry standard.
- Farmer Role (AM/CSM): 70/30 or 80/20 Split. Since they manage existing revenue, they get a higher base for stability.
- Lead Gen (SDR): 65/35 Split. This protects junior employees from volatile swings while still incentivizing meetings booked.
If your AE plan is 70/30, you are over-insuring them (and likely attracting "coasters"). If it is 30/70, you are making the role too risky for top talent.
3. Benchmarking Commission Rates
How much of the revenue should you give back to the rep?
- The Golden Rule: The "10% Cost of Sales" rule.
- For a standard SaaS AE, the Commission Rate (CR) is typically 8% to 12% of ACV.
If you are paying 18-20% on standard deals, your Unit Economics are likely broken. You need to re-evaluate your pricing or your quota expectations.
Frequently Asked Questions (FAQ)
Where can I find reliable salary data?
Avoid self-reported sites like Glassdoor, as the data is often old or unverified. Use specialized reports from RepVue, Betts Recruiting, or Pave. These platforms use real-time placement data from the current year.
Should we adjust pay for geography?
This is the biggest debate of 2026. The trend is moving toward National Tiers rather than specific city adjustments. Create 3 tiers (Tier 1: SF/NY, Tier 2: Austin/Chicago/Denver, Tier 3: Everywhere else) to simplify administration.
How do I fix a plan that is "Under Market"?
You don't have to raise base salaries across the board immediately. Start by raising the ceiling. Add aggressive accelerators for over-performance. This allows your top talent to earn market rates if they deliver, without raising your fixed costs for underperformers.
Related Reading
See Where Your Plan Stands
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