How Do You Break Down a Sales Executive's Salary Structure with Fixed and Variable Pay?

Hi everyone, I just wanted to know how to break down the salary structure of a sales executive, including both fixed and variable pay. Kindly help.

For a sales executive, you should first decide the percentage for fixed and variable salary. The person's fixed salary needs to be divided into the following heads:

- Basic
- HRA
- Conveyance
- Other Allowances, etc.

Terms for Variable Pay

You need to clearly mention the terms for receiving their variable pay. For instance, if your company plans to pay the variable amount yearly, quarterly, or half-yearly.

Regards

Suppose we have salary criteria for Sales Executives in our company, which is fixed between 5K to 7K. Apart from this, we provide Rs. 300 for mobile. If a sales executive is on tour, we provide Rs. 250 per day for food and lodging. In a day, a sales executive has to visit at least one college and meet with the HOD of the department, including the Principal and librarian, and at least one bookseller as well. For the visit to one college, we provide Rs. 100 per college for traveling.

Salary Breakup Inquiry

What will be the salary breakup for it? What will be the fixed and variable pay and CTC for the company?

Thanks in advance.

Dear Krishan, I hope you have not forgotten the Finance Module covered during your MBA. Is the fixed salary not categorized as Basic and HRA? If you are providing a mobile allowance irrespective of its usage, you can classify that as fixed. As the food and lodging allowance depends on whether the sales executive is on tour or not, it will be variable. The same goes for any payment that depends on what the executive does. However, for CTC regulations, please refer to some government documents.

Have a nice day.

Simhan

In fixed structures, we can include basic salary, HRA, conveyance allowance, medical allowance, mobile allowance, and other allowances. In variable components, we can have bonuses and incentives.

Thanks & regards,
Sumit