These instructions will help you set up and configure commission rates and amounts for employees in your software. The Commission System has two settings: 1) Use single commission system: if employees earn commission for the entirety of the sale and use of services and products. 2) Use dual commission system: if different commissions are earned on the original sale and when/if the service is used. Both options are explained in detail in this article.
Single Commission Income Overview
The recommended configuration for payroll is the Single Commission System. This means that the employees' commission is based on the amount shown in the Commission Based On column on the Ticket Information screen for all tickets for the selected time period.
Click Use single commission system under the Commission System section of the Payroll Configuration window.
Double-click the box directly underneath the desired employee that is horizontally in-line with the
Hourly field.The Hourly screen will appear.
You can select to pay the employee in the following ways:
No hourly pay: this employee does not receive hourly pay
Rate of |___| per hour: enter the rate of pay per hour worked, i.e. $9 for $9/hour
Based on hourly table: the rate of hourly pay fluctuates based on the settings of an established table
Click OK to return to the Payroll Configuration screen.
Double-click the box directly underneath the desired employee that is horizontally in-line with the Adjustment field.
The Adjustment screen will appear.
You can select to pay the employee in the following ways:
No adjustment: this employee does not receive a pay adjustment
Use |___| (currency amount): enter an adjustment to the employee's normal pay. Adjustments will remain through payroll periods, so if the adjustment is a one-time bonus, it must be removed before the next payroll period is calculated
Click OK to return to the Payroll Configuration screen.
Double-click the box directly underneath the desired employee that is horizontally in-line with the Tips Claimed field.
The Tips Claimed screen will appear.
You may select to claim tips in the following ways:
Don't claim tips: this employee does not receive tips
Prompt me for this employee's tips each time I run payroll: set claimed tips based on a prompt before payroll is calculated. Some business prefer to have their employees record daily tips on a sheet that is then added during payroll calculations
Based on amounts claimed on tickets: claimed tips are calculated based on closed tickets over the specified pay period
Fixed percentage of services sold: claimed tips are based on a set fixed percentage from the services provided on closed tickets over the specified pay period
Fixed amount: claimed tips are based on the same fixed amount every pay period
Click OK to return to the Payroll Configuration screen.
Employee commission for products and services may be calculated in three common ways:
Fixed: there is one commission rate that is applicable to all total sales, minus backbar, regardless of the currency amount, i.e. if the employee’s total sales minus backbar is $2300, and the commission rate for that employee is set to 10%, then the commission amount received will be 10% of $2300, or $230.
Stepped: a specific commission rate will be determined by set intervals of the employee’s total sales, i.e. if the employee’s total sales minus backbar is $2300, and the commission intervals are set up so that if the employee’s sales total is between $0.00 - $999.99 he or she will receive 10% commission, if the sales total is between $1000-1999.99 he or she will receive 12% commission, and if the sales total is between $2000-2999.99 he or she will receive 14%, then the employee would receive 14% of $2300, or $322.
Incremental Stepped: adjusts the percentage rates at intervals of total sales, but pays at the interval rates, i.e. if the employee’s total sales minus backbar is $2300, and the commission rates are set up so that if the employee’s sales total is between $0.00 - 999.99 the employee receives 10%, for $1000-1999.99 the employee receives 12%, and for $2000-2999.99 the employee receives 14%, then by using an incremental stepped scale, the employee will now receive 10% for the first $1000 out of $2300, plus 12% of the second $1000 out of $2300, plus 14% of the $300 out of $2300. This would be (0.10 x $1000) + (0.12 x $1000) + (0.14 x $300) = $100 + $120 + $42 = $262.
Double-click the box directly underneath the desired employee that is horizontally in-line with the Product Commission field.
The Product Commission screen will appear.
You can select to pay the employee in the following ways:
No commission: this employee does not receive product commission
For all product sales amounts that are not bonuses or exceptions, use the following percentage: the employee earns a straight percentage on all products sold excluding products with specific bonuses and exceptions
For all product sales amounts that are not bonuses or exceptions, use the following table: if the employee will receive commission based on a stepped or incremental stepped scale, select the appropriate commission table from the drop-down list
Click OK to return to the Payroll Configuration screen.
Double-click the box directly underneath the desired employee that is horizontally in-line with the Service Commission field.
The Service Commission screen will appear.
You can select to pay the employee in the following ways:
No commission: this employee does not receive service commission
For all service sales amounts that are not bonuses or exceptions, use the following percentage: the employee earns a straight percentage on all services rendered excluding services with specific bonuses and exceptions
For all service sales amounts that are not bonuses or exceptions, use the following table: if the employee will receive commission based on a stepped or incremental stepped scale, select the appropriate commission table from the drop-down list
Click OK to return to the Payroll Configuration screen.
To configure overtime settings and tables, see the article here.
Commission Determinants
When using the Single Commission System, there are four configurable entities for each service (price, backbar, bonus, and commission) and three for each product (price, bonus, and commission). Each has either a Standard or Exception value. There are, therefore, sixteen possible configurations for each service and twelve for each product.
Price: a standard price can be defined, and exceptions created as needed per employee. If you change the service price, this new price will apply to all future tickets created after the point in time in which you changed the service price. The change is not retroactive.
Backbar: a standard backbar amount can be defined, and exceptions created as needed per employee. This backbar amount is subtracted from the Commission Based On amount when determining employee commission. The total backbar on a ticket is calculated as: Backbar times Qty Used.
Bonus: a standard bonus can be defined, and exceptions created as needed per employee. A bonus is a lump sum awarded to an employee for the selling of a service. It is independent of commission. The total bonus for a ticket is calculated as: Bonus times Qty Prch.
Commission: a commission percentage or lump sum can be awarded to an employee for performing a service. This number is usually determined from the Payroll Configuration screen, but exceptions can be created as needed per employee. If you change the commission amount, it will apply to all tickets. The change is retroactive. You can make commission exceptions for each employee based on the Commission tab within a service. If you make a commission exception, the settings under the
Commission tab within the service are used instead of the settings on the Payroll Configuration screen.
Summary
Changing the service price for an employee IS NOT a retroactive change. Closed ticket amounts during a pay period are not affected if an employee's service price is changed. Only open tickets can be altered.
Changing the commission for an employee IS a retroactive change. If an employee's commission rates and amounts are altered during a pay period, the new amount will be applied to all closed tickets during that pay period.
If an employee’s commission is defined as an exception percentage, then the exception is calculated
as: Exception = (Commission Based On – (Backbar*Quantity Used))*Exception%If an employee’s commission is defined as an exception lump sum, then the exception is calculated as: Exception = (Lump Sum - Backbar)*Quantity Used
Dual Commission Income Overview
The Dual Commission System is able to give different commission amounts when a service is used and when
a service is purchased. When using the Dual Commission System a Commission Used Based On column and
a Commission Purchased Based On column will appear on tickets. Dual Commission payroll income can be
set almost identically to Single Commission payroll income, except for a few minor differences.
Click Use dual commission system under the Commission System section in the Payroll Configuration window..
For each service you will need to set up the Service Commission When Used and Service Commission When Purchased. This is done in the Edit Service screen for each of your services.
Click OK to exit out of the Payroll Configuration screen.
Go to the Services screen.
Edit the service and click the Commission tab.
Click the Commission When Purchased tab and choose one of the following:
None: no commission is given to the employee when the service is purchased
Fixed currency amount of: the commission issued to the employee selling the service is in the form of a lump sum. The value used in Payroll Configuration is ignored. This exception will apply to any employee selling the service
Fixed percentage amount of: the commission issued to the employee selling the service is a percent of the Commission Purchased Based On column. The value used in Payroll Configuration is ignored. This exception will apply to any employee selling the service
Based on Payroll Configuration screen: the commission issued to the employee selling the service is based on the percent amount found in Payroll Configuration, either a straight percentage or based on a commission table. To make exceptions to the Payroll Configuration, click the Exceptions button and add any employees exempt from the normal routine. If you do an exception, the commission issued to the employee selling the service is based on an exception value, either a lump sum or a percentage amount. If an exception is chosen, the value found in Payroll Configuration is ignored. Different employees can have different exception values for the same service
Click the Commission When Used tab and choose one of the following:
None: no commission is given to the employee when the service is performed
Fixed currency amount: the commission issued to the employee performing the service is in the form of a lump sum minus the backbar amount. The value used in Payroll Configuration is ignored. This exception will apply to any employee performing the service
Fixed percentage amount: the commission issued to the employee performing the service is a percent of the Commission Used Based On column minus the backbar amount. The value used in Payroll Configuration is ignored. This exception will apply to any employee performing the service
Based on Payroll Configuration screen: the commission issued to the employee performing the service is based on the percent amount found in Payroll Configuration, either a straight percentage or based on a commission table. To make exceptions to the Payroll Configuration, click the Exceptions button and add any employees exempt from the normal routine. If you do an exception, the commission issued to the employee performing the service is based on an exception value, either a lump sum or a percentage amount minus the backbar amount. If an exception is chosen, the value found in Payroll Configuration is ignored. With this option selected, different employees can have different exception values for the same service
You may choose to make exceptions to the amount of backbar for each employee. A standard backbar amount can be defined and exceptions created as needed per employee. This backbar amount is subtracted from the Commission Used Based On amount when determining employee commission. This backbar amount is subtracted only when a service is used and not when purchased. The total backbar for a ticket can be calculated as: Backbar times Qty Used.
You may choose to make exceptions to the bonus paid for a service for each employee. A standard
bonus can be defined and exceptions created as needed per employee. A bonus is a lump sum
awarded to an employee for the selling of a service. It is independent of commission. There is no
bonus for the performing of the service. The total bonus for a ticket can be calculated as: Bonus times Qty Prch.Click Save to exit.
Commission Determinants
When using the Dual Commission System, there are five configurable entities for each service (price, backbar, bonus, commission when purchased, and commission when used) and three for each product (price, bonus, and commission when purchased). Each has either a Standard or Exception value. Product determinants remain the same as with a Single Commission System with twelve configurable entities. For services, two entities
can either have a None value, some type of exception value, or be based on the Payroll Configuration
screen. There are seventy-two possible configurations for any employee using the Dual Commission System
for each service.
Price: a standard price can be defined and exceptions created as needed per employee. If you change the service price, this new price will apply to all future tickets created after the point in time in which you changed the service price. The change is not retroactive.
Backbar: a standard backbar amount can be defined and exceptions created as needed per employee. This backbar amount is subtracted from the Commission When Used amount when determining employee commission. This backbar amount is subtracted only when a service is used and not when purchased. The total backbar for a service on a ticket is calculated as: Backbar times Qty Used.
Bonus: a standard bonus can be defined and exceptions created as needed per employee. A bonus is a lump sum awarded to an employee for the selling of a service. It is independent of commission. There is no bonus for performing a service. The total bonus for a ticket is calculated as: Bonus times Qty Prch.
Commission When Purchased (CWP): this commission is issued when a service is sold by an
employee. If you change the commission amount, it will apply to all tickets and is retroactive.Commission When Used (CWU): this commission is issued when a service is performed by an
employee. If you change the commission amount, it will apply to all tickets and is retroactive.
Summary
A generic exception will apply to any employee selling or performing the service.
A specific exception will apply only to the employee selling or performing the service for which the
exception was defined.Changing the service price for an employee IS NOT a retroactive change. Closed ticket amounts during a pay period are not affected if an employee's service price is changed. Only open tickets can be altered.
Changing the commission when purchased for an employee IS a retroactive change. If an employee's commission rates and amounts are altered during a pay period, the new amount will be applied to all closed tickets during that pay period.
Changing the commission when used for an employee IS a retroactive change. If an employee's commission rates and amounts are altered during a pay period, the new amount will be applied to all closed tickets during that pay period.
A bonus is awarded only when a service is sold.
A backbar amount is subtracted from the service price only when a service is performed.