In recruitment, few topics spark more debate—and more curiosity—than commission structures.
Whether you're a consultant trying to work out if you're being paid your worth or a business owner looking to stay competitive, one question reigns supreme:
Is my commission structure any good?
Let’s break it down.
The Rule of Thumb: The One-Third Principle
Establishing a universal standard for commissions is tough. That said, a common rule of thumb for a 360-consultant billing between £100k and £500k per year is that your total package (base + commission) should amount to roughly one-third of your billings or gross profit (GP).
That’s:
- One-third to the consultant
- One-third to cover costs
- One-third for business profit
But this doesn’t mean you get a flat 33% on every pound billed. Commission models vary widely—thresholds, tiers, triggers, margin-based models—it’s all about structure and strategy.
When Less is More: Roles with Lower Commission Rates
Not every recruiter handles the full recruitment lifecycle. Roles like:
- Account Managers
- Business Development Managers
- Resourcers
- Delivery Consultants
… often have more conservative structures, typically between 2% and 15%, depending on the role and their influence on new business.
Trainees or those working inherited accounts may also fall into lower commission brackets—but context matters. A lower rate isn’t automatically a bad deal.
When More is Justified: High-Incentive Models
Some businesses intentionally offer above-average commission to attract and retain high performers. You may be earning more if you:
- Trade a higher base salary for generous commission
- Join a startup with equity or bonus potential
- Consistently outperform targets as a 'super biller'
- Take on team management responsibilities
Generous schemes aren’t just perks—they’re strategic tools to drive exceptional performance.
Management Has Its Perks
Leadership roles typically include override commissions—a slice of the team’s success.
This might look like:
- 2% to 10% override on individual team members’ GP
- 5% to 15% on the entire team’s billings (including your own)
At the operational level, rewards may be based on:
- Team GP
- Net Profit (NP)
- Year-on-Year growth
- Quarterly or annual bonuses
Good management structures align team performance with leadership rewards.
Thresholds, Standard Requirements & Desk Charges
Many commission structures include thresholds—a minimum level of performance before commission kicks in.
Some consultants view thresholds as a red flag, but it’s all about balance:
Would you prefer no threshold with a lower payout, or a threshold with higher upside once you clear it?
Other variables like standard requirements or desk charges may apply. If your billing is steady and predictable, a threshold might be no big deal. But if it's inconsistent, understand the trade-off.
When Is Commission Actually Paid?
You’ve earned it—but when do you see it?
The timing of payouts can dramatically affect motivation and cash flow:
- Best case: Paid on invoiced revenue, monthly
- Less ideal: "Pay-when-paid" models (waiting on client payment)
- Worst case: Quarterly or held structures, which delay reward and hurt momentum
Watch the small print—timing matters as much as totals.
The Structures That Shape Your Income
How your commission is applied to your billings is just as important as the percentage itself. Here are the most common models:
Tiered Structure
Commission rates increase as GP rises, but each rate only applies to earnings within that tier.
Example:
- GP: £20,000
- £0 – £5,000 @ 0% = £0
- £5,001 – £10,000 @ 15% = £750
- £10,001 – £15,000 @ 20% = £1,000
- £15,001 – £20,000 @ 25% = £1,250
Total Commission: £3,000
Flat Rate
One consistent percentage across all billings. Clean and predictable.
Example:
- GP: £18,500
- 15% flat = £2,775
Per-Placement
A fixed amount paid per successful placement—often used for trainees or resourcers.
Example:
- 3 placements @ £300 = £900
Stepdown/Trigger Structure
Once a higher tier is hit, the top percentage is applied to all GP.
Example:
- GP: £20,000
- Hitting the 25% tier = £5,000 commission
This format is highly rewarding, especially for consistent top performers.
Percentage-Charged Structure
Your commission is tied to the fee charged to the client—encouraging better fee negotiation.
Example:
- Placement 1: £7k @ 18% = £1,260
- Placement 2: £7k @ 15% = £1,050
- Placement 3: £4.5k @ 10% = £450
Total Commission: £2,760
Key Considerations for Recruiters & Business Owners
For Recruiters:
- Know how your commission is calculated
- Understand when it's paid
- Assess whether it aligns with your realistic billing expectations
For Business Owners:
Commission structures should:
- Be competitive enough to attract talent
- Be sustainable enough to maintain profit margins
You must stay informed about competitor structures and market expectations. Pitch too low, and you risk losing talent. Pitch too high, and margins suffer.
Final Thoughts: It’s Not Just About Percentages
A good commission structure isn’t just about what percentage you’re paid—it’s about how it’s paid, when it’s paid, and whether it reflects the value you bring.
The best structures are:
- Motivational
- Fair
- Scalable
- Transparent
Because in recruitment, structure is everything.
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