This is the piece most owners get stuck on. I hear it constantly — guys have flat-rate pricing dialed in but freeze on the pay side. They're scared that "commission" means giving away margin, or that it'll turn their techs into pushy salesmen. Done right, it does the opposite. It's the single thing that took my techs from clock-watchers to owners of their own numbers.
Here's how it actually works.
The three pieces
A good tech pay plan has exactly three moving parts. Miss one and the whole thing wobbles.
- The base. A wage they can live on. This is their security — it's what lets a tech take this job and feel safe, not gamble their mortgage on a slow month.
- The quota. The line they have to cross before commission kicks in. This isn't a number you pull from the air — it's built from their burden rate plus a fair contribution to overhead and profit.
- The split. How you divide everything they produce above the quota — commonly 60% to the crew, 40% to the company. This is where the upside lives.
Why the quota is the whole game
The quota is what protects you. Because it's built on the tech's real cost, you don't pay a dime of commission until the company is already covered — burden, overhead, and a baseline profit. Every commission dollar after that comes out of profit you wouldn't have had if the tech produced less. That's why this isn't "giving away margin." You're sharing the upside on work that only exists because the tech hustled.
This is why burden rate comes first. If you don't know your real cost, you can't set a quota, and without a quota a commission plan is just you bleeding money and hoping.
The math, worked out
Let's run a tech for one month. Your numbers will differ — this is the shape of it.
That tech just cleared $7,900 for the month — base plus commission. String productive months together and you're at $80–100K a year with benefits. Now notice what the company got: it kept the full quota — every dollar of its cost and its profit floor — plus 40% of the overage, another $2,400 on work that wouldn't have happened if the tech coasted. The company was made whole before the split ever happened. That's exactly why the crew can take the bigger share of what's left: it's pure upside.
When the upside is theirs, behavior changes overnight. They stop padding hours and start chasing production. They quit watching the clock because the clock isn't where the money is anymore. And they stop leaving — because nobody walks away from a job where they're earning $90K and they can see exactly how to earn more.
Why not just pay hourly or pure commission?
Pure hourly pays a tech the same whether they crush it or coast. You're literally paying for time, not results — so you get time, not results. Pure commission swings too far the other way: no floor, no security, and techs start cutting corners or selling stuff the customer doesn't need just to eat. Base-plus-commission is the balance. Floor for safety, ceiling they control.
Set the percentages to fit your margins
The 60/40 I used — 60 to the crew, 40 to the company — is a common starting point, not gospel. Tighter margins might mean the company keeps more of the overage; a high-skill division might justify a richer split for the tech. What matters is the structure: base for security, quota built on real cost, and a shared upside above it. Get those three right and the exact numbers are just dials you tune.
Common questions
What if a tech misses quota?
They still get their full base — that's the point of a base. No commission that month, but they're not underwater, and the company isn't either, because the quota was set at your break-even. A tech who chronically misses quota is a coaching or fit problem, not a pay problem.
Should commission be on revenue or on profit above cost?
Above cost, always. Paying commission on raw revenue means you can pay out on jobs that lost money. Tying it to production above the quota — which is built on cost — guarantees you're only sharing real upside.
How often should techs see their numbers?
Every pay period. The incentive only works if it's visible. A tech who can see their production, quota, and commission in real time will manage themselves toward it. One who finds out at year-end won't.
Does this work for a one or two-man shop?
Yes. Even with one tech, a quota built on real cost plus a split above it changes how they work — and it builds the structure you'll need the day you hire your second.
Build the pay plan on real numbers
Blue Collar Pay sets each tech's quota off their burden rate, runs the split, and reports it every pay period — so the math is done and the incentive stays in front of your crew.
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