Worked example
A $20,000 target bonus at 110% attainment, with a 50% threshold paying 25% of target, rising in a straight line to 100%, then to a 200% maximum reached at 150% attainment.
| Input | Value |
|---|---|
| Bonus target (at 100%) | $20,000.00 |
| Attainment | 110% |
| Threshold (below it, no bonus) | 50% |
| Payout at threshold (% of target) | 25% |
| Maximum payout (% of target) | 200% |
| Attainment where the maximum is reached | 150% |
| Result | Value |
|---|---|
| Bonus payout | $24,000.00 |
| Payout as % of target | 120% |
| Objective 1 payout | $24,000.00 |
| Objective 2 payout | $0.00 |
- Objective 1 curve factor: 120%
- Objective 1: target × weight × factor: $24,000.00
- = Bonus payout: $24,000.00
How the payout curve works
Below threshold: payout = 0
Threshold to 100%: factor = threshold payout + (1 − threshold payout) × (attainment − threshold) ÷ (1 − threshold)
Above 100%: factor = 1 + (max payout − 1) × (attainment − 1) ÷ (max attainment − 1), capped at max payout
Bonus = target × factor
The curve is made of straight lines between three anchor points: the threshold, 100%, and the maximum. Unlike a commission, the bonus does not depend on deal size; it depends only on attainment against a goal. To design a full curve with more points, try the pay curve calculator.
Two objectives (MBO-style weighting)
Bonus = target × (w × factor(score 1) + (1 − w) × factor(score 2))
Each objective runs through the same curve separately, then the results are weighted. This way, a weak score on one objective is judged against the threshold on its own instead of being averaged with a strong score first. If your plan averages scores first, enter the blended score as a single attainment instead.
Limitations
- Linear interpolation only; stepped curves or tiers are not modelled.
- Both objectives share the same curve and threshold.
- Estimates only, not payroll or tax advice: bonuses are typically taxed as supplemental wages.
For a one-off product incentive rather than a goal-based bonus, see the SPIFF calculator.
Frequently asked questions
What is the difference between a bonus and a commission?
A commission is a rate applied to what you sell, so it grows with every deal. A bonus is a fixed target amount scaled by attainment against a goal, which suits roles where individual revenue is hard to attribute.
What does the threshold do?
Below the threshold the bonus is zero. At the threshold it jumps to the payout you set, then rises in a straight line to the target amount at 100% attainment.
Is the maximum a cap?
Yes. Once attainment reaches the level you set for the maximum, the payout stays at the maximum percentage of target no matter how far attainment goes.