How to Handle Split Sales Commissions Without the Hassle

As a business leader, you know that no major sales deal is a solo effort. Behind every closed deal is a team of contributors, account executives, sales engineers, and customer success reps, working together to deliver results. Yet, traditional commission structures often fail to recognize this collaboration, leading to disputes and disengagement.

Split sales compensation payments aim to solve this challenge, ensuring fair incentives for all contributors. In this blog, we’ll explain split sales compensation, why it matters, and how to use it effectively in your business.

What Are Split Sales Compensation Payments?

Split sales compensation payments allocate commissions among multiple contributors based on their roles, efforts, or predefined rules. This system acknowledges team collaboration rather than individual wins.

This approach addresses critical pain points like:

• Disputes over "who did what" in closing deals.
• Incentivizing roles that are crucial but often overlooked (e.g., technical presales).
• Retaining top talent by ensuring fair and transparent compensation.

How Split Sales Compensation Works Across Industries

Ever notice how different industries seem to have their own “sales rhythm”? A SaaS company’s sales process looks nothing like a real estate deal, and the stakes for a B2B manufacturer differ wildly from retail. But there’s one thing every industry shares: collaboration is key to closing deals. That’s where split sales compensation becomes the great equalizer. It’s not a one-size-fits-all solution but a versatile approach that adapts to industry-specific needs.

‍

1. SaaS Companies

In SaaS sales, deals often involve multiple touchpoints, including sales development reps (SDRs) for prospecting, account executives for negotiations, and customer success teams for onboarding. Allocating commissions across these roles ensures alignment with business goals.

2. Real Estate Firms

Split commissions prevent disputes for properties sold via joint efforts. An agent who sourced the buyer and another who closed the deal can share rewards based on predefined ratios.

3. Retail and Distribution

For high-ticket B2B sales, split payments encourage cooperation between field sales reps, key account managers, and support staff.

Types of Split Sales Compensation Structures

From an employer’s perspective, choosing the right structure can shape team dynamics and reduce administrative headaches.

‍

1. Proportional Split
   Allocate based on actual effort or revenue contribution.
   Example: If a closer contributes 60% to a $20,000 deal, they receive $12,000 in commission.
2. Fixed Percentage Split
   Assign fixed percentages per role. This is ideal for predictable, repeatable sales cycles.
   Example: Customer success always earns 10% of every deal.
3. Role-Based Split
   Define splits by job function to prioritize collaboration over competition.
   Example: 50% for closers, 30% for product specialists, 20% for support roles.
4. Threshold-Based Split
   Incentivize overachievement by rewarding teams that exceed quotas.
   Example: Surpassing a $500,000 target unlocks a bonus pool split across contributors.

Why Are Split Sales Compensation Payments Important for Employers?

‍

A survey found that 60% of U.S. workers would consider switching to a company offering more transparent pay practices​. It’s super important to have a fair commission structure to ensure employees are content.

1. Foster Collaboration

Split payments eliminate infighting over commissions, promoting teamwork. According to Salesforce, businesses using team-based incentives report a 17% increase in deal closures.

2. Retain Talent

Fair pay structures boost morale and reduce turnover. Employees who feel recognized for their efforts are 67% less likely to leave, per a Gallup survey.

3. Align With Business Goals

Rewarding contributions from all roles ensures no critical function is overlooked. For instance, acknowledging the work of a technical sales engineer can prevent bottlenecks in closing complex deals.

How to Track and Manage Split Sales Compensation Effectively

As an employer, you want a system that’s not only fair but also efficient. After all, nobody has time to sift through endless spreadsheets or juggle manual calculations. 

1. Consolidate Payout Events

Reduce the frequency of payouts to streamline payroll processes.
Example: Instead of issuing monthly payouts, align commissions with quarterly invoicing.

2. Use Incentive Compensation Management

Managing split sales compensation can feel like spinning plates, keeping everything balanced while ensuring no one’s efforts go unnoticed. Thankfully, modern technology is here to save the day.

Take Kennect, for example. It’s built specifically for automating incentives and compensation. With features like dynamic split calculations, real-time analytics, and seamless integration with your existing CRM, it ensures that every contributor gets their due, accurately and on time. Plus, by automating repetitive tasks, you can reduce payout delays and minimize the friction that often comes with managing complex compensation structures.

3. Balance Risk with Predictability

If most deals follow a standard pattern, establish default splits for efficiency, handling exceptions manually.

4. Incorporate AR Measures

Tie commissions to aged accounts receivable metrics to ensure payouts only reflect realized revenue.

5. Separate Booking and Invoicing Payments

Split payouts across booking milestones and invoice fulfillment to align with cash flow.

When to Use Split Sales Compensation Payments

Split sales compensation payments are a powerful tool, but they’re not always necessary. They really shine in specific situations where multiple team members contribute to the outcome of a deal or when the sales cycle is particularly complex.

1. Deals Requiring Input from Multiple Roles

In many sales processes, the closer isn’t the only person responsible for bringing in the revenue. Each of these roles adds value at different stages of the deal, and using split compensation helps distribute the commission fairly based on their contribution.

2. Complex Sales Cycles with Long Timelines

Some industries, like real estate or enterprise software, have long and complex sales cycles. These deals may take months—or even years—to close, with multiple touchpoints, negotiations, and decision-makers involved. During these extended cycles, multiple people contribute to keeping the deal on track. Split payments in these cases ensure that everyone involved in nurturing the deal is properly compensated, even if the deal closes after a long period.

3. Teams Working Collaboratively Across Departments

When sales teams work closely with other departments like marketing, customer support, or even product development, split compensation can be important, It fosters a sense of shared ownership and incentivizes collaboration. 

How to Determine Split Sales Compensation

Determining the right split for sales compensation is a balancing act. You need to consider the roles involved, the deal's complexity, and how each team member’s effort impacts the final outcome. Here's a step-by-step approach to help you decide:

1. Analyze Roles, Effort, and Deal with Complexity

Start by taking a deep dive into the sales process. Identify which roles contribute the most value at each stage of the deal. Is the deal primarily driven by the lead generation team, or does it depend on deep technical expertise from the product team? Are there major contributions from post-sales teams, like customer success or account management, that need to be accounted for?

2. Determine How Deal Stages Impact Outcomes

Every stage in the sales cycle contributes to the final outcome. Consider how each department’s involvement at various stages contributes to a successful close. For instance, is the deal closed primarily by an account executive, or do you need to involve product specialists, technical teams, or legal advisors? For each role, think about how their involvement impacts the deal’s success and how that should be reflected in the split.

3. Can Metrics Quantify Contributions Fairly?

It’s essential to quantify contributions in a way that’s objective and measurable. Can you track lead generation efforts, product demos, or customer onboarding as discrete actions with clear outcomes? The more you can break down each phase of the process and assign metrics, the fairer your split will be.

Example: In a SaaS deal, the sales process might involve multiple roles that each add value at different stages.

• Lead Generation: The SDR or marketing team brings in the lead, which could account for 20% of the final commission.
• Product Demo: The product team or account executive gives the demo, which might be worth 40% of the split.
• Closing: The account executive closes the deal, securing 30% of the commission.
• Onboarding: The customer success team ensures smooth onboarding, adding the final 10%.

This system ensures that the different contributions are recognized and rewarded according to their impact on the overall sale.

Final Thoughts!

At the end of the day, adopting the right split compensation model isn’t just about numbers, It sends a message loud and clear: We succeed together, and we win together. After all, a team that wins together, earns together.

So, take a step back, evaluate how your compensation system is working, and consider whether it’s encouraging the teamwork you need. With the right split compensation plan in place, your team will be more aligned, motivated, and ready to take on anything that comes their way. When they win, you win—and that’s the kind of growth that builds empires.

‍