At-risk pay, also known as pay at risk or variable pay, is that proportion of an employee’s salary that is not fixed. It is ‘at risk’ of not being paid to the employee, as opposed to their fixed component which they can be sure of receiving at the end of each pay period. The at-risk or variable component is usually dependent on external variables such as employee or company performance. Commissions and bonuses are some examples of at-risk pay.

In recent years, the trend has shifted to include higher variable components in many employee salaries, especially those working in a sales capacity. In some industries you will find sales reps on an 80/20 plan, which means 80% of their salary is fixed while 20% is variable and performance-based. Others still might have a 60/40 or 50/50 split. Industries like insurance, stockbroking and real estate have some of the highest at-risk splits, with the ratio going up to even 0/100 at times.