Free Bonus Calculation Formula HR Template

Bonus Calculation Formula

The bonus calculation for members of the Sales Team at the [Your Company Name] is designed to reward and incentivize outstanding sales performance. The formula takes into account several factors to determine the bonus amount for each team member.

Base Bonus Percentage (BP)

The base bonus percentage is set at 5% of the total sales revenue generated by the employee

Sales Revenue Achievement Percentage (SRAP)

This factor encourages employees to exceed their sales targets. The SRAP is calculated as follows:

  • If the employee meets their individual sales target: SRAP = 100%

  • If the employee exceeds their target by 10%: SRAP = 110%

  • If the employee exceeds their target by 20% or more: SRAP = 120%

Customer Satisfaction Score Percentage (CSSP)

The satisfaction of customers is essential to our business. The CSSP is based on the average customer satisfaction scores received for deals closed by the employee. It is calculated as follows:

  • If the CSS is 4.0 or higher: CSSP = 105%

  • If the CSS is between 3.5 and 3.99: CSSP = 100%

  • If the CSS is below 3.5: CSSP = 95%

Quarterly Performance Bonus (QPB)

To further reward consistent performance, employees receive a quarterly performance bonus. This is calculated as a fixed percentage of their cumulative sales revenue for the quarter. The QPB percentage is determined by management and can range from 2% to 5%.

Team Collaboration Bonus (TCB)

Collaboration within the sales team is encouraged and rewarded. Employees receive a TCB if they actively support their colleagues and contribute to team success. This is a fixed amount of $500 per eligible deal.

Bonus Cap (BC)

To manage budget constraints, there is a cap on the total bonus amount that any employee can receive. The bonus cap is set at 20% of their annual salary.

Final Bonus Calculation

The final bonus amount for each employee is calculated using the following formula:

Bonus = (BP x SRAP x CSSP x Total Sales Revenue) + QPB + TCB

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