Variable rate commissions, also known as percentage-based commissions, are a compensation structure commonly used in various industries where individuals or entities are paid a percentage of the total value of a transaction or sale. Unlike fixed-rate commissions, where the commission amount remains constant regardless of the transaction value, variable rate commissions are directly tied to the monetary amount of the transaction. As the transaction value increases or decreases, the commission amount also changes proportionally. This approach to compensation helps motivate sales reps to pursue higher value deals. They are generally used when sales teams are focused on overall revenue growth over number of units sold.