Rate Table (Tiered Rate Table)
What is a rate table?
A rate table is the lookup structure inside a compensation plan that maps a range of attainment to a commission rate. It is how a tiered commission plan is actually expressed: not as prose, but as a table with bands, boundaries, and rates.
It sounds like a formatting detail. It is not. Two rate tables with identical rates can pay dramatically different amounts, because the thing that determines the payout is not the rates — it is how the boundaries behave.
A rate table has three parts
The same table, two answers
One rate table. One rep. $1,200,000 closed against a $1,000,000 quota — 120% attainment.
Now apply it two ways.
What this means?
A $40,000 difference from the same table. The rates are identical. The rep's performance is identical. The only thing that differs is a sentence about how the boundary behaves — a sentence most plan documents do not contain.
Reps overwhelmingly assume the retroactive reading, because it is the intuitive one: "I hit the 12% tier, so I get 12%." Finance overwhelmingly builds the marginal one, because it is the one the budget survives. Neither party is wrong, and both discover the disagreement at payout.
Boundary conditions: the other silent failure
A rate table with bands written as 0–100%, 100–120% has an undefined answer at exactly 100%. Which rate applies? The plan does not say. In a spreadsheet it depends on whether someone typed >= or >, and that person left the company.
Write bands as inclusive-exclusive and state it: 0% ≤ attainment < 100%, 100% ≤ attainment < 120%. It is unglamorous and it eliminates an entire category of dispute.
Why rate tables matter for finance teams
The application method is the single largest uncontrolled variable in commission expense. On the example above, retroactive application costs 38% more than marginal for the same performance — and if your plan document is silent, you have not chosen; you have deferred the choice to whoever built the spreadsheet.
Retroactive tables also create a cliff: a rep at 99.9% attainment earns dramatically less than a rep at 100.1%, because the higher rate reaches back over everything. That is a strong incentive to sandbag deals across a period boundary, and an even stronger one to dispute a deal's close date.
Common mistakes with rate tables
1. Not stating the application method
Marginal or retroactive. One sentence. It is worth tens of thousands of dollars per rep and it is missing from most plans.
2. Ambiguous band boundaries
If 100% appears in two bands, or in neither, the plan has no answer at exactly the point most reps land.
3. Building the table in a spreadsheet with nested IFs
A five-band table is a five-deep nested formula that one person understands. Rate tables belong in structured plan data, not in a cell.
How Visdum handles rate tables
Visdum holds the rate table as structured plan data — bands, boundaries, rates, and the application method as an explicit setting rather than an implicit consequence of a formula. Changing a band or a rate is a configuration change with a version history, not a spreadsheet edit. On the rep's statement, each deal shows which band it fell into and which rate applied, so a rep at 120% can see the $104,000 derivation line by line instead of taking a total on faith. And because the table is modelled rather than typed, you can run a proposed table against last year's actual attainment distribution and see what marginal versus retroactive application would have cost — before you commit to either.
Take a self-guided product tour →, or read tiered vs progressive commission.
Related terms
Tiered Commission · Progressive Commission · Tiered vs Progressive Commission · Accelerator · Plan Component
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Frequently asked questions
What is a rate table in a commission plan?
A lookup structure that maps attainment ranges to commission rates — for example, 8% up to 100% of quota, 12% from 100–120%, and 16% above that. It is how a tiered commission plan is actually expressed. A rate table has three parts: the bands, the rates, and the application method that determines how boundaries behave.
What is the difference between marginal and retroactive rate application?
Under marginal (or bracket) application, each rate applies only to the revenue inside its band. Under retroactive (or cliff) application, reaching a band applies its rate to all revenue from the first dollar. On a $1.2M performance against a $1M quota, that is the difference between $104,000 and $144,000 of commission from the identical table.
Which is more common, marginal or retroactive?
Marginal application is far more common in practice, because it is what the budget survives. But reps overwhelmingly assume retroactive application, because it is the intuitive reading — "I hit the 12% tier, so I get 12%." The disagreement is usually discovered at payout, which is the worst possible moment.
What happens at exactly 100% attainment in a rate table?
Whatever your spreadsheet's comparison operator happened to say — which is not an acceptable answer. If bands are written as 0–100% and 100–120%, the plan is genuinely ambiguous at the single point where most reps land. Write bands as inclusive-exclusive and say so explicitly: 0% ≤ attainment < 100%, 100% ≤ attainment < 120%.
Why do retroactive rate tables cause sandbagging?
Because they create a cliff. A rep at 99.9% attainment earns dramatically less than one at 100.1%, since crossing the boundary re-rates every dollar already closed. That is a powerful incentive to push a deal across a period boundary, and an even stronger one to dispute a deal's close date. Marginal tables have no cliff and therefore no cliff behaviour.
How should a rate table be documented?
With the bands as inclusive-exclusive ranges, the rate for each band, and one explicit sentence naming the application method. That last sentence is worth tens of thousands of dollars per rep and is missing from most comp plans. Nested spreadsheet formulas are not documentation — they are a single person's understanding, held in a cell.