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Customize How Discounts Affect Sales Commission

How to set sales commission base on pre- or post-discount totals

Written by Matt Honeycutt

If you pay your employees commission, you may want to pay them based on charges either before or after discounts have been applied. We'll go through a few examples later in the article to help illustrate the difference.

Changing the Setting

By default, SmartMoving calculates commissions on a Pre-Discount basis. This means commission will be based on values before discounts are applied. You can change this setting in Settings ->  Job Discounts, then looking in the "Commission Settings" block.

Example 1: Pre-Discount

Let's take a user that gets a 5% commission on Labor, with the commission set to "Pre-Discount". 

  • Labor costs: $1000

  • Discount: 10%

  • Final labor cost: $900 

  • Final commission paid: $50. 

Since the setting is Pre-Discount, the math is $1000 * 5% = $50. The discount does not affect how much commission is paid.

Example 2: Post-Discount

Let's take a user that gets a 5% commission on Labor, with the commission set to "Post-Discount". 

  • Labor costs: $1000

  • Discount: 10%

  • Final labor cost: $900 

  • Final commission paid: $45. 

Since the setting is Pre-Discount, the math is $900 * 5% = $45. In this case, the discount changes the commission, since it is now based on a lower amount.

Example 3: Post-Discount with a Specific Discount Amount

Things are more straightforward when it's a percentage discount amount. But what if the discount is a flat amount? For that, we'll need a more complex example with some other costs. Let's see an example again with a user that receives a 5% commission on Labor with the system configured for "Post-Discount".

  • Labor costs: $1000

  • All other charges (valuation, fees, etc): $1500

  • Total cost: $2500

  • Discount: $100

  • Final cost: $2400

  • Final "pro-rated" labor cost: $960

  • Final commission paid: $48

What we're doing in this situation is we're treating the discount amount as a percentage discount. $100 off of a $2500 job is a 4% discount. So, then we take 4% off of the $1000 labor costs, leaving us with $960 labor costs, which is what we use for our commission calculation. 


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