A sales commission rate is a percentage of the total sale value that a salesperson earns for the deals they close. Salespeople within the same industry that sell similar products can still make very different commissions, even if their total sale value is the same.

For example, Anna and John work for competitor jewelry stores. Anna earns a 5% commission if her total sale value is under $10,000 a month, while John earns 7% for the same band. But if Anna's total sale value is between $10,000-$50,000 in a month, she will earn a 10% commission, while John will earn 9% for the same band.

For those of you wondering: What is a good commission rate for sales reps? The answer to that depends on the industry. For instance, the average commission rate for SaaS sales is around 8-10%, while real estate and insurance salesmen make anywhere between 5-10%. It's a good idea to research the average rates for your industry before setting your own.