I was doing some thinking on the different types of jobs that I've had and I'm surprised at the different kinds of ways my compensation was structured. I'm just talking straight cash so Salary and commission. Here are a few different ways a company might try to structure your pay

Salary Only
Salary + Bonus
High Salary + Low Commission/Bonus
Low Salary + High Commission
Draw Against Commission
100% Commission

I'm sure there are more but these are the one's I've dealt with directly and here are my experiences with each one.

Salary Only: I liked this because it's straight forward and stable. There are rarely any variances in the money you expect coming in. Barring any promotions or raises you'll be safe expecting the same amount of money deposited in your account per pay period.

Salary + Bonus: Exact same as the above except you're eligible for a bonus at your employer's discretion. Usually given annually around Xmas or the beginning/end of a fiscal yr. I like this a bit more than the above since there' a tax benefit with depositing this into your RRSP.

High Salary + Low Commission/Bonus: Jobs that have some sort of performance/sales component may offer a chance to have a Salary at the higher end and for every "deal" you close you get a small portion of the profits/revenue.

Again a big fan of this because of the stability angle

Low Salary + High Commission: These are typical in a lot of sales jobs. You'll have a super low salary (usually sub 35k a year) but you'll have a chance to earn up to 50% of the profits from any deal you close.

Im not a fan of this because of a lack of stability and a ton of

Hidden factors that you might not consider until it's too late. For example, if you were to go to a bank for a mortgage they would be very reluctant to include your commissions into their debt-to-income ratio calculations because they aren't guaranteed or consistent.

Banks usually require you to have worked that job for 3+ years with similar or increasing commissions before they can see you as anything but high risk. You should feel really strong about your skills, network, and sense of industry before agreeing to this kind of model.

Draw Against Commission: Your employer will give you a guaranteed amount of money per pay period with the expectation that you'll pay it back when you close a deal. Yes, you're basically borrowing your salary from your employer with a promise to pay it back via your commission.

That means that before you could expect to make ANY extra money via commission, you would have to clear the deficit made by your salary. This is ghetto. This is the worst because a lot of commission-based jobs require both a cleared payment and a following moratorium before

It can be applied to your deficit. If the timing is off you could easily owe your employer money despite the fact you've closed enough deals that are equal to double or triple your salary.

When I first got into Recruiting the Agency I was working with had this setup. I had a draw of 50k per year for my salary and I was entitled to 30% of the profits per deal. It was all good at first until a few clients started dragging their feet with paying their invoices.

There was a 90 day delay between the client's cheque clearing and it being applied to my deficit. The situation flipped upside down and all of a sudden my deficit kept growing, despite me closing deal after deal.

Do you know how infuriating it is to bring in over 200k worth of new business to your employer only for them to turn around and say you owe them money because their system is deeply flawed?

It feels like you're being hustled.

Speaking of hustles.

100% Commission: This is exactly what it sounds like. You forsake a salary in lieu of having an incredibly high commission rate. Usually this in the ballpark of 60-80% of the Profits. Unless you're a true subject matter expert, a Sales God, and have ample

savings, I suggest you stay away from this. Most of these environments are toxic and shady. If you look at a lot of the MLM scam jobs on Indeed the pay structure is usually 100% Commission. Also if you're going to do work for a 100% Commission, just go start your own business.

I hope you've found this helpful. In this day and age, you should be able to have a nice balance between stability and the potential to earn more. Anything less, you should look into working for yourself because it's bullshit otherwise.