Payment Timing Policy
This policy establishes standard payment timing for all sales incentive compensation to ensure compliance with state wage payment laws, consistent participant experience, adequate time for calculation and validation, alignment with payroll cycles, and financial planning and accrual accuracy.
1Purpose & Objectives
This policy establishes standard payment timing for all sales incentive compensation to ensure compliance with state wage payment laws, consistent participant experience, adequate time for calculation and validation, alignment with payroll cycles, and financial planning and accrual accuracy.
- •Compliance with state wage payment laws
- •Consistent participant experience
- •Adequate time for calculation and validation
- •Alignment with payroll cycles
- •Financial planning and accrual accuracy
2Scope
Applies To
- •All sales incentive compensation payments across all divisions and plans
3Definitions
Data Cut-Off
The 5th business day of the month following the performance period, by which all sales must be finalized in source systems (CRM, ERP). Finance validates revenue data and Sales Operations locks data for calculation.
Minimum Payment Threshold
The minimum amount ($50) per payment period below which payments are carried forward to next period. Paid annually if cumulative amount remains below threshold. Paid upon termination regardless of amount.
4Key Provisions
Standard payment frequencies based on plan type.
Rationale for Timing
Payment frequency rationale by plan type.
- •Monthly: For high-transaction plans where participants need regular feedback and cash flow
- •Quarterly: Balances administrative efficiency with timely payout for quota-based plans
- •Annual: For long-cycle sales or strategic metrics requiring full-year assessment
Standard Payment Frequencies
| Plan Type | Standard Frequency | Payment Timing |
|---|---|---|
| Transactional/High Volume | Monthly | By last business day of following month |
| Territory/Quota-Based | Quarterly | Within 30 days of quarter end |
| Annual Plans | Annually | Within 45 days of year end |
| SPIFs | At program end | Within 15 days of program close |
5Compliance References
Federal Laws
- •Federal Income Tax: Supplemental wage rate (22% for amounts up to $1M per year)
- •FICA: Social Security (6.2% up to wage base) and Medicare (1.45%, plus 0.9% additional Medicare tax for high earners)
State Laws
- •California: Next regular payday after commission earned; immediately upon involuntary termination
- •New York: As per plan terms; next regular payday upon termination
- •Texas: As per plan terms; next regular payday upon termination
- •State wage payment laws (vary by state)
- •State income tax withholding requirements
- •State disability and local taxes where applicable