Designing Tech Sales Compensation That Actually Works

You hit your targets. Closed those tough accounts. Maybe even overachieved.

But when the compensation breakdown hits your inbox, something doesn’t feel right. The numbers don’t quite add up. There’s a clawback here, a missing accelerator there, and suddenly, your well-earned commission looks a little less exciting.

Sound familiar?

You’re not alone. In 2025, tech sales compensation has become a moving target. What used to be a simple split between base salary and commission is now a complex blend of bonuses, SPIFs, stock options, and variable structures, each with its own set of rules.

And if you're trying to navigate it all, whether you're building your first sales team or negotiating your own comp plan, it can feel like a black box.

That’s exactly why this guide exists.

You’ll learn what tech sales compensation really includes, how different roles are paid, and what factors influence your earning potential, from location to industry to experience. You'll also get real-world benchmarks, practical examples, and a step-by-step framework to help you structure a comp plan that actually makes sense.

By the end, you won’t just understand your paycheck, you’ll know how to maximize it.

What is Tech Sales Compensation?

Tech sales compensation refers to the total earnings you receive as a sales professional working in the technology industry. It goes far beyond just your base salary. In fact, what you take home often depends on multiple factors, like how much you sell, how your commission is structured, and what kind of benefits or equity your company offers.

At its core, technology sales compensation typically includes:

• Base salary – the fixed amount you earn regardless of performance.
  
• Variable pay – including commission and bonuses based on individual or team performance.
  
• Equity or stock options – common in startups and growth-stage companies.
  
• Other perks – like health insurance, retirement plans, travel reimbursements, or performance accelerators.

Let’s say you’re working as a technical sales representative at a SaaS company. Your base might be $70,000, but with commissions, overachievement bonuses, and stock options, your total on-target earnings (OTE) could jump to $120,000 or more. That delta between your base and your total earnings? That’s where compensation gets interesting and strategic.

Components of Tech Sales Compensation Plans

When people talk about tech sales compensation, most think “salary + commission.” But the truth? It’s much broader than that. Let’s break down the core components you need to understand:

Base Salary

This is your fixed income, the portion of your compensation that arrives like clockwork, regardless of how many deals you close. It offers financial stability and reflects factors like your role, experience, location, and the size of the company you work for. 

While it's often the most predictable part of your paycheck, it usually makes up only a portion of your total earnings in tech sales.

Variable Pay

Variable pay includes everything beyond your base salary. Unlike fixed pay, this portion of your compensation is tied directly to performance, meaning the better you sell, the more you earn. It’s designed to reward outcomes, drive motivation, and align your efforts with company goals.

1. Commission

Commission is the percentage you earn on the deals you close. There are a few ways companies structure this:

• Flat-rate commission: A fixed % on every deal, say 10%.
  
• Tiered commission: Higher rates once you cross a certain quota (e.g., 10% up to target, 15% for anything above).

Tiered models incentivize overperformance, which is why they’re commonly used in SaaS.

2. Bonuses

Bonuses can be individual or team-based, and they’re usually awarded for hitting targets, closing strategic deals, or contributing to long-term initiatives.

You’ll often see quarterly or annual bonuses, and some companies even reward team collaboration through group-based performance bonuses.

3. Equity & Stock Options

Working in tech often means getting a piece of the company. Startups and growth-stage companies offer equity or stock options to align your success with the company’s. It’s a long-term incentive designed to reward retention and commitment.

Reuters says that in 2025, we’re seeing a shift toward cash-heavy comp plans in uncertain markets, but equity still plays a key role in companies expecting to scale or IPO. 

Other Benefits

Comp plans today are more holistic than ever. Here's what else might be on the table:

• Accelerators: Higher commission rates for surpassing quota.
• SPIFs (Sales Performance Incentive Funds): Short-term cash or prizes for hitting specific goals.
• Profit Sharing: A cut of the company’s profits, more common in startups.
• Overachievement Rewards: Extra bonuses for top performers (think: all-expense-paid trips or leadership offsite invites).
• Retention Bonuses: Lump sums for staying with the company beyond a milestone.
• Benefits: Health insurance, 401(k), retirement plans, mental health support.
• Expense Reimbursements & Travel Allowance: Especially important in hybrid or field roles.

Each company mixes these elements differently, but understanding how they work together helps you evaluate offers and build plans that retain high performers.

How Are Tech Sales Reps Compensated?

The way you’re compensated in tech sales depends heavily on your role, sales position, experience level, and even where you live. While the structure may look similar across companies (base + variable), the actual numbers can vary widely. 

Let’s break it down by role, experience, and geography so you can see where you stand (or what you should be aiming for).

Tech Sales Salary By Role

Not all tech sales jobs are created equal, and neither are their paychecks. Each job title carries unique responsibilities and earning potential. Here’s a breakdown of how salaries stack up across the most common positions in tech sales.

1. Sales Development Representative (SDR)
SDRs typically focus on outbound prospecting and qualifying leads. Their median base salary is $55000, and their median total compensation or OTE is $85,000.

2. Account Executive (AE)
AEs close deals. Their average salary is usually around $95,000, but with commissions, the median OTE comes around $180,000, depending on industry and region.

3. Sales Manager/Director
Leadership roles carry more pressure, and more pay. Sales managers often earn around $140,000 as median base salary, with OTEs reaching up to $260,000 for seasoned leaders.

Understanding how each role pays is key to not just choosing the right job, but mapping out a sustainable career path in tech sales.

Tech Sales Compensation by Location

Location still matters, especially in a hybrid world. While remote roles are more common, many companies still adjust salaries based on the cost of living and local market benchmarks.

1. San Francisco, CA
San Francisco remains the highest-paying tech hub for sales professionals. SDRs here earn a median base salary of $60,000 with OTE around $90,000, while top performers can reach up to $127,842. AEs in the region average over $117,000 in total compensation, with top earners in enterprise SaaS crossing the $400,000+ mark thanks to commissions, accelerators, and equity.

2. New York, NY
In New York City, tech salespeople have a strong earning potential. SDRs earn a median base salary of $56,600 with OTE around $80,000, and top performers reach $134,000. AEs, especially in enterprise SaaS, earn base salaries near $100,000, with high performers pushing total compensation up to $400,000+ through commissions and equity.

3. Austin, TX
Austin is quickly becoming a competitive tech sales market. SDRs in the city earn a median base salary of $55,000 with OTE around $80,000, and top performers reaching up to $121,573. Account Executives fare even better, with a median base of $85,000 and on-target earnings of $170,000, with high achievers crossing the $421,489 mark.

Factors Influencing Tech Sales Compensation

You might wonder why two people in similar roles can have dramatically different pay packages. The answer? Compensation in a tech sales career isn’t just about what you do. It’s about where, how, and who you do it for. Here are the variables that shape your earnings in 2025.

Company Size

Startups vs. Established Companies

Working at a Series A startup is a very different world from working at a Fortune 500 tech firm, and the compensation reflects that.

• Startups may offer a lower base salary range, but balance that with generous equity and growth incentives. It’s a risk-reward model.
  
• Established companies, on the other hand, often offer higher base pay, structured commission plans, and richer benefits, with less reliance on long-term stock growth.

Industry & Tech Sector

Not all tech industries are created equal, especially when it comes to sales earnings.

• Software sales and SaaS roles often pay more due to subscription models and predictable revenue streams.
  
• Hardware sales typically involve longer deal cycles and slimmer commission structures.
  
• Emerging sectors like AI, cloud computing, cybersecurity, and climate tech are currently offering some of the highest salaries, driven by rapid market demand.

According to Gartner, sectors like AI and cybersecurity are showing double-digit growth rates, making them hotbeds for sales opportunities and compensation spikes.

Experience & Skills

Experience doesn’t just increase your paycheck, it changes the kind of comp plan you get.

• A rep with 3–5 years of experience in SaaS sales might command much higher salaries or receive quarterly bonuses for strategic deals than entry-level sales reps.
  
• Those with 10+ years are often in leadership or strategic roles, with OTEs nearing (or exceeding) $200K+, particularly if they’re closing enterprise accounts.

And it’s not just sales experience that counts.

Technical fluency, like knowing how CRMs work, understanding the product architecture, or being able to talk to business development managers, makes you far more valuable. Companies are increasingly looking for hybrid sellers who understand both business and tech.

How to Structure a Tech Sales Compensation Plan

Building a tech sales compensation plan isn’t just about putting numbers in a spreadsheet. It’s about aligning pay with performance, company goals, and team motivation. Here’s a step-by-step process to create a plan that works on the ground.

1. Define Your Sales Goals

Before structuring any payout, you need clarity on what success looks like. Is your sales team focused on new business? Expansion? Long-term retention? Your compensation strategy should mirror these goals.

• Align comp metrics with company-wide objectives (e.g., ARR growth, churn reduction).
  
• Choose whether to reward quantity (e.g., number of deals) or quality (e.g., deal size, retention).
  
• Prioritize one goal per role to avoid misalignment (e.g., AEs focus on new revenue, AMs on upsells).
  

2. Segment Roles & Responsibilities

Every sales role contributes differently, so lumping them into one comp plan is a mistake. Tailor your compensation plan to the tasks, risk, and impact level of each role.

• Create separate plans for SDRs, AEs, and Account Managers.
  
• Match compensation structure to role outcome (e.g., meetings booked vs. revenue closed).
  
• Make sure that support roles like Pre-Sales or Sales Engineers are also recognized if they impact deals.
  

3. Set Clear, Realistic Quotas

Quotas are the heart of any performance-based comp plan. But unrealistic expectations can kill motivation fast. Instead, base them on data, not guesswork.

• Use past performance data, pipeline velocity, and industry benchmarks to set targets.
  
• Adjust quotas for ramping reps and new territories.
  
• Test quotas quarterly and iterate based on rep feedback and win rates.
  

4. Choose Your Commission Model

Your commission model should incentivize the behavior you want. Simplicity builds trust. Complexity builds confusion.

• Use flat-rate commissions for fast, transactional sales cycles (e.g., SMB SaaS deals).
  
• Use tiered commissions to reward overperformance and large enterprise deals.
  
• Add kickers for strategic deals, multi-year contracts, expansion revenue, or breaking into a new vertical.
  

5. Include Accelerators & Kickers

Accelerators are powerful motivators for high performers. When reps know there’s more to earn beyond their quota, they’re more likely to push for stretch goals.

• Add 1.5x–2x commission rates after 100% quota attainment.
  
• Introduce limited-time kickers for product launches or priority accounts.
  
• Use team-based accelerators for cross-functional collaboration goals.
  

6. Review & Adjust Quarterly

Sales comp plans should evolve with the business. What worked last year may not work today. Reviewing your structure regularly ensures alignment and keeps your reps engaged.

• Schedule quarterly reviews of comp performance vs. goals.
  
• Solicit rep feedback anonymously to surface pain points.
  
• Monitor industry trends and adjust for competitiveness and fairness.

One company that mastered this shift is Diligent, a GRC SaaS firm that moved away from a legacy system to a modern setup using Everstage. Previously bogged down with Excel-based workflows and visibility gaps, their compensation team couldn’t think beyond the month’s payouts.

But once they implemented a data-driven system with real-time dashboards and strategic planning tools, they saved 96% of their time and cut costs by 70%. What used to be manual compensation processing is now a proactive, quarterly-reviewed strategy that directly supports their growth goals.

Read the Full Case Study Here. 

Common Mistakes and How to Avoid Them in Structuring Tech Sales Plans

A great compensation plan can supercharge your sales team. A poorly designed one? It can demotivate your top reps, confuse everyone else, and derail your revenue goals. Here are some of the most common (and costly) mistakes to watch out for and how to avoid them.

1. Misaligned Incentives

When your comp plan rewards the wrong behaviors, your team starts chasing goals that don’t serve your business. For example, if you over-reward quick wins, long-term customer value might suffer.

• Incentivize actions that drive sustainable revenue, not just short-term deals.
• Align metrics to lifecycle stages (e.g., new revenue for AEs, retention for CSMs).
• Include quality metrics (renewals, churn, NPS) in variable comp for roles impacting retention.

2. Overcomplicated Structures

If your salespeople need a spreadsheet, a calculator, and a legal dictionary to understand how they get paid, you’ve lost them. Complexity erodes trust and hurts performance.

• Stick to 2–3 core variables in each plan (e.g., quota attainment, deal size, retention).
• Use tiered commissions or bonuses sparingly, and clearly explain them in onboarding.
• Provide monthly earnings summaries so reps know how each deal impacts their pay.
  

3. Unrealistic or Unattainable Quotas

Aggressive quotas might look good on paper, but when reps miss targets consistently, morale crashes and so does your pipeline.

• Base quotas on historical data, average win rates, and available territory.
• Include ramp periods for new hires, typically 3 to 6 months.
• Adjust quotas for seasonality, product maturity, or market shifts.

4. Ignoring Ramp Time for New Hires

Expecting a new rep to hit full quota in their first month? That’s a recipe for churn. Ramp periods aren’t a luxury, they’re a necessity.

• Offer a lower quota for the first 90 days.
• Consider drawing payments or guaranteed commission during the ramp.
• Align ramp expectations with deal cycle length; longer cycles = longer ramps.

5. Lack of Transparency

Your reps shouldn’t have to guess how they’re being paid. When there’s confusion, there’s distrust, and that drives top performers out the door.

• Document compensation plans in clear, jargon-free language.
• Include real examples of how different outcomes affect payouts.
• Host quarterly Q&A sessions on the company structure and updates.

Even the best comp plan will fall flat if your team doesn’t trust it, understand it, or believe they can win with it. Avoiding these mistakes builds a culture of clarity and high performance.

Conclusion 

In 2025, tech sales compensation isn’t just about dollars and decimals. It’s about direction. A well-structured plan doesn’t just pay your sales team. It aligns them. Motivates them. Retains them. 

And when done right, it becomes a silent engine driving every demo booked, contract signed, and target smashed.

You’ve seen what goes into compensation, from salary structures to accelerators, from role-based variations to region-based insights. You’ve also seen how the most forward-thinking companies are rethinking their systems, moving away from spreadsheets and guesswork toward clarity, flexibility, and real-time visibility.

So here’s the real question:

Are you compensating your team in a way that fuels performance, or just maintaining a monthly routine?

Because the best sales teams aren’t just better at selling. They’re backed by systems that make success visible, earnings predictable, and growth inevitable.

If you’re ready to build that kind of system that helps your team sell smarter and scale faster, Everstage might just be the partner you're looking for.

See it in action. Book a quick demo and explore how compensation can become your growth advantage now!