A first-line sales manager is paid on the team’s results, and two designs are worth comparing: an override, which pays a rate on all team revenue, or a team-attainment bonus, which pays a target amount scaled by how much of the team quota is reached. This page works both through on the same illustrative team so you can compare them. To run the override version on your own numbers, use the manager override calculator.
All figures are illustrative and chosen for easy arithmetic. They are not pay benchmarks for sales managers.
The role and the team
A manager leading five account executives, each with an annual quota of $800,000. The manager hires, coaches, forecasts and helps close larger deals, but does not carry a personal quota.
Team quota roll-up: 5 × $800,000 = $4,000,000. In this example the team quota equals the sum of rep quotas. A lower team quota would cushion vacancies and ramping hires; a higher one would ask the manager to deliver more than the reps’ plans add up to. Build either version with the quota calculator.
Manager variable target: $80,000 a year. The manager’s base salary and pay mix are your own decisions; we do not publish manager pay figures.
Option A: override on team revenue
The override rate is set so the manager earns the variable target at 100% of team quota:
override rate = $80,000 ÷ $4,000,000 = 2%
Above team quota, an accelerator of 1.5× applies to the revenue above quota only, so the effective rate on that revenue is 3%.
| Team attainment | Team revenue | Calculation | Override paid |
|---|---|---|---|
| 50% | $2,000,000 | $2,000,000 × 2% | $40,000 |
| 100% | $4,000,000 | $4,000,000 × 2% | $80,000 |
| 150% | $6,000,000 | $6,000,000 × 2% = $120,000, plus $2,000,000 × 2% × 0.5 = $20,000 | $140,000 |
At 150%, the same result can be read as $80,000 on the first $4,000,000 plus 3% on the $2,000,000 above quota ($60,000).
Strengths: simple, paid from the first dollar, easy to calculate from the reps’ credited revenue. Weakness: it pays the same whether results come from the whole team or from one star rep, and pays something even when the team is far below plan.
Option B: team-attainment bonus with MBOs
The same $80,000 target is split into two parts:
- Team component, $60,000 (75%): paid as $60,000 × team attainment, from 50% attainment upward (nothing below 50%). Above 100%, each point of attainment pays 1.5× its normal value. Capped at 200% of the component ($120,000).
- MBO component, $20,000 (25%): paid on written objectives such as hiring plan completed, new hires ramped on time and forecast accuracy. Scored up to 100%. The table assumes all objectives are fully met, to keep the comparison with Option A clean.
| Team attainment | Team component | MBO component | Bonus paid |
|---|---|---|---|
| 40% | $0 (below threshold) | $20,000 | $20,000 |
| 50% | $60,000 × 50% = $30,000 | $20,000 | $50,000 |
| 100% | $60,000 × 100% = $60,000 | $20,000 | $80,000 |
| 150% | $60,000 + ($60,000 × 50% × 1.5 = $45,000) = $105,000 | $20,000 | $125,000 |
For comparison, Option A pays $32,000 at 40% ($1,600,000 × 2%). The sales bonus calculator handles thresholds, weights and caps; the pay curve calculator shows the whole curve.
Comparing the two options
| Team attainment | Option A: override | Option B: bonus (MBOs met) |
|---|---|---|
| 40% | $32,000 | $20,000 |
| 50% | $40,000 | $50,000 |
| 100% | $80,000 | $80,000 |
| 150% | $140,000 | $125,000 |
Both pay $80,000 at target. Option A pays more above plan and below the 50% threshold. With MBOs met, Option B pays more between 50% and 100% (at 75%, $65,000 against $60,000), pays only the MBO part at very low attainment, and rewards management work that revenue does not capture, but it rises more slowly above quota.
Keeping the manager plan aligned with the reps’ plans
The manager plan should pull in the same direction as the plans of the people on the team. If reps are paid on first-year ACV, the override or team component should be measured on the same credited ACV, from the same CRM report, on the same dates; otherwise the manager and the reps will argue from different numbers. Accelerators should start at the same point too: a manager whose accelerator starts at 100% of team quota while reps accelerate at 100% of their own quotas stays aligned only if the team quota is the sum of rep quotas, as in this example. Finally, the manager’s cost sits on top of the reps’ commissions on every deal, so include it when you check the total cost of sales with the total commission rate calculator.
Design choices to settle in writing
- Which revenue rolls up: only reps on the team at the time of the deal, or the team’s territory? What happens when a rep transfers mid-year?
- Vacancies: does the team quota drop when a seat is empty, and from when? The sales capacity calculator shows what vacancies and ramp do to team output.
- Distribution: should part of the payout depend on how many reps reach quota, so one rep cannot carry the whole team?
- Clawbacks: when a rep’s commission is clawed back, is the manager’s override on that deal recovered too?
- Timing: override paid monthly with the reps’ commissions, bonus paid quarterly, or both?
Test the final design with your actual team in the commission plan simulator, and return to the plan examples by role for the AE and SDR plans that sit under this one.
Key takeaways
- Team quota here is the sum of rep quotas: 5 × $800,000 = $4,000,000.
- Override rate = manager variable target ÷ team quota: $80,000 ÷ $4,000,000 = 2%.
- The override pays $40,000 / $80,000 / $140,000 at 50/100/150% of team quota.
- The bonus option pays $50,000 / $80,000 / $125,000 at the same levels, with MBOs met.
- Decide in writing how vacancies, transfers and clawbacks affect the manager’s pay.
Frequently asked questions
What is a sales manager override?
An override is a commission paid to a manager on the revenue credited to the reps who report to them, at a rate applied to team revenue. It is paid on top of the reps' own commissions, not taken out of them.
Should a manager's team quota equal the sum of the reps' quotas?
Not necessarily. Some companies set the team quota below the sum of rep quotas to absorb vacancies and ramping hires, others set it equal. Whatever you choose, write it down and check what it does to the manager's attainment when a seat is empty.
Can a player-coach carry their own quota?
Yes, but then separate the two parts of the plan: commission on their own deals under the AE rules, and a smaller team component. Crediting the same deal twice to the same person in both parts should be ruled out in writing.