Marginal (Bracket) Commission Explained

When your organisation enables marginal (bracket) commission, each tier's rate applies only to revenue earned within that bracket — not to the rep's total revenue. The calculation works exactly like income tax brackets: lower revenue earns the lower rate, and only the portion that crosses into a higher bracket earns the higher rate.

The result is a smooth earnings curve. There are no cliff-edge jumps where collecting one extra rand suddenly raises the rate on all previous revenue.

Understanding the bands

Consider this tier schedule with marginal mode enabled:

• Bronze — R10 000 to R24 999: 8.2%
• Silver — R25 000 to R49 999: 10%
• Gold — R50 000+: 13%

Each pair of consecutive tier minimums defines a band:

• Bronze band: R10 000 → R24 999 (band ceiling = next tier's minimum, R25 000)
• Silver band: R25 000 → R49 999 (band ceiling = R50 000)
• Gold band: R50 000 → no ceiling

Revenue below the first tier minimum (below R10 000 in this example) is in an uncovered band and earns no commission.

How the calculation works — step by step

For a rep who collects R32 000 this month:

1. Bronze band (R10 000 – R25 000): The rep has at least R25 000, so the full band of R15 000 is in play. R15 000 × 8.2% = R1 230
2. Silver band (R25 000 – R50 000): The rep collected R32 000 total, so R7 000 falls in this band (R32 000 − R25 000). R7 000 × 10% = R700
3. Gold band: Revenue hasn't reached R50 000, so nothing applies here.
4. Total commission: R1 230 + R700 = R1 930

The formula for each band is: (amount of revenue that falls within this band) × (band rate). If revenue doesn't reach the start of a band, that band contributes zero.

No cliff-edge effect

The key difference from flat-rate is that crossing a band boundary does not retroactively raise the rate on all previous revenue. Compare two reps near the R25 000 Silver boundary:

• Rep A: R24 900 → Bronze band only → R14 900 × 8.2% = R1 221.80
• Rep B: R25 100 → Bronze + R100 in Silver → (R15 000 × 8.2%) + (R100 × 10%) = R1 230 + R10 = R1 240

Rep B earned R200 more in revenue and got R18.20 more in commission. There is no cliff — Rep B is not suddenly earning 10% on R24 900 they were already going to collect.

The effective rate

Because multiple rates combine, the commission dashboard shows an effective rate for the period — the total commission expressed as a percentage of total revenue. For Rep B above: R1 240 / R25 100 = 4.94% effective rate. The effective rate always falls between the lowest and highest active tier rates.

How marginal and flat compare at the same revenue

At identical revenue, flat-rate always produces equal or higher commission than marginal. This is because flat applies the top qualifying rate to all revenue, while marginal only applies that rate to revenue within the top band.

Example at R32 000 (using the same tier schedule):

• Flat-rate: Active tier = Silver (10%). Commission = R32 000 × 10% = R3 200
• Marginal: R1 230 (Bronze) + R700 (Silver) = R1 930

Flat-rate pays R1 270 more on the same revenue. The trade-off is the cliff-edge effect — and whether you want reps incentivised by milestone jumps (flat) or steady per-rand uplift (marginal).

What the calculator shows

The Commission Settings page includes an interactive calculator under the Tiers tab. Enter any revenue amount and the calculator shows exactly how it would be split across your configured bands, what each band contributes in commission, the marginal total, and a comparison against what the flat-rate method would produce for the same amount. Use it to answer "what would my rep earn at R45k?" before committing to a tier structure.