Many business owners, HR professionals, and managers struggle to develop an effective salary and bonus policy for sales employees due to limited experience and technical expertise. Therefore, in this article, KMC will guide you through how to design a compensation framework that is both appealing and fair, fully compliant with Vietnamese labor regulations, and aligned with the requirements of your parent company.
What Is a Salary and Bonus Policy?
A salary and bonus policy is a set of internal regulations established by a company to manage and administer salaries, bonuses, allowances, and other employee benefits — particularly for sales teams who are constantly striving to meet performance targets. It functions as a “clear contractual framework” between the company and its employees, ensuring transparency, fairness, and compliance with labor laws (as stipulated under the 2019 Labor Code and Decree No. 145/2020/NĐ-CP).
A well-designed salary and bonus policy is not only a mechanism for timely and lawful salary payments but also a key motivational tool for employees. When individuals clearly understand how their compensation is determined — whether based on sales results, performance targets, or special contributions — they tend to feel more secure and perform more effectively.
Core Components of a Salary and Bonus Policy for Sales Staff
A salary and bonus policy for sales employees must strike a balance between fairness and motivation, encouraging staff to reach their full potential. Therefore, a comprehensive policy should include the following key components:
Basic Salary (Fixed Salary)
The basic or fixed salary is the stable income a sales employee receives each month, regardless of performance results. It serves as a “financial foundation,” ensuring stability in personal life and compliance with statutory obligations such as social insurance contributions. The salary level should be determined based on industry benchmarks and standard working conditions, as prescribed in the 2019 Labor Code and Article 4 of Circular No. 96/2015/TT-BTC.
Allowances
Allowances are financial supplements intended to reduce employees’ work-related expenses. Companies may consider providing meal, transportation, fuel, phone, or responsibility allowances for team leaders and supervisors. These payments not only demonstrate the company’s care and support but also enable employees to stay focused on their business objectives.
Bonuses
Bonuses act as a major incentive for sales staff to exceed performance targets. Under Article 4 of Circular No. 96/2015/TT-BTC, all bonus schemes must be transparent to prevent misunderstandings, yet flexible enough to motivate employees. The policy should specify various types of bonuses, such as revenue-based bonuses (for meeting or surpassing sales goals), year-end bonuses, individual performance bonuses, and innovation bonuses for creative initiatives.
Employee Benefits
Employee benefits represent a long-term retention strategy. These typically include paid leave, social insurance, support in cases of illness, family events, occupational accidents, and other special benefits in accordance with company policy.
Common Salary and Bonus Structures and How to Choose the Right One
Based on practical application in Vietnam and the relevant legal framework — particularly Article 93 of the 2019 Labor Code — the following are common compensation models you may consider, along with guidance on how to select the most suitable one for your business.
Time-Based Salary Model (Time Rate System)
This is the traditional pay method, in which salaries are calculated based on the employee’s actual working days. The basic salary is combined with fixed allowances (e.g., seniority, transportation), ensuring stable income for most workers.
Example:
A sales employee receiving a basic salary of VND 6 million per month and allowances of VND 1.5 million will earn VND 7.5 million if working the full month.
- Advantages: Suitable for positions requiring stability and minimal sales pressure.
- Disadvantages: Provides limited motivation and is less attractive to high-performing employees.
- Recommended for: Small enterprises or sales support staff who are not directly responsible for closing deals.
Piece-Rate Salary Model
Under this model, pay is calculated based on the number of units sold multiplied by a predetermined unit rate.
Example:
If an employee sells 40 units of Product A (VND 30,000 per unit) and 50 units of Product B (VND 40,000 per unit), the total income will be VND 3.2 million per month.
- Advantages: Strongly motivates employees to increase output; compensation is directly tied to performance.
- Disadvantages: May negatively impact product quality if employees focus solely on quantity.
- Recommended for: Retail or fast-moving consumer goods (FMCG) sectors with simple transactions.
Revenue-Based Salary Model (Sales Commission System)
This method combines a base salary with a commission on achieved revenue.
Example:
With a base salary of VND 5 million and a 5% commission on VND 50 million in sales, the total monthly income would be VND 7.5 million.
- Advantages: Links income directly to business performance, encouraging proactive sales efforts.
- Disadvantages: Income may fluctuate, causing pressure when sales are unstable.
- Recommended for: High-value sectors such as real estate and insurance.
KPI-Based Salary Model (2P and 3P System)
This modern approach determines pay based on Position (P1), Performance (P3), and in the case of 3P, Personal Capability (P2) as well.
Example:
Under the 2P model (P1 + P3), an employee with a fixed salary of VND 6 million and 50% KPI achievement (VND 3 million) will earn VND 9 million in total. The 3P model (P1 + P2 + P3) adds additional rewards based on skills or competencies.
- Advantages: Ensures fairness and transparency while motivating skill and performance development.
- Disadvantages: Requires a clear and objective performance evaluation system to avoid managerial bias.
- Recommended for: Large enterprises seeking to link pay to multiple performance indicators (e.g., revenue, deal closures, customer satisfaction).
Lump-Sum Salary Model
Under this structure, compensation is calculated based on the volume of completed work multiplied by a fixed contract rate.
Example:
If a sales representative signs a contract with a target of 100 completed deals, each worth VND 1 million in lump-sum payment, the total income will be VND 100 million upon completion of all 100 deals.
- Advantages: Encourages productivity and reflects workload-based fairness.
- Disadvantages: Difficult to monitor time and progress; unsuitable for creative or qualitative work.
- Recommended for: Construction, transportation, or project-based business operations.
Case Study: Applying Commission Schemes by Industry
Each industry has its own operational characteristics; therefore, customizing the commission structure not only helps motivate the sales team but also optimizes the company’s overall profitability. Below are several practical examples that you can flexibly apply to common business sectors:
Fast-Moving Consumer Goods (FMCG) Sector
Products in the FMCG sector have high turnover, large transaction volumes, and a focus on expanding distribution channels such as supermarkets and convenience stores.
Recommendation:
A revenue-based commission model can be applied, where employees receive a commission calculated as a percentage of total monthly sales. In addition, incentives such as a VND 1,000,000 bonus for securing a contract with a major distributor, a transportation allowance (VND 500,000/month), and a mobile phone allowance (VND 300,000/month) can help employees stay motivated and productive. Example: If a salesperson achieves VND 100 million in monthly revenue, their total income would be:
VND 5 million (base salary) + VND 4 million (4% commission) + VND 800,000 (allowances) = VND 9.8 million.
Tip:
Consider integrating a KPI for acquiring new customers to encourage market expansion.
Real Estate Sector
Real estate involves high-value transactions, long sales cycles, and extensive client relationship management.
Recommendation:
Apply a tiered commission structure. For instance, the company may offer:
- 1% commission for contracts below VND 5 billion,
- 2% for contracts between VND 5–10 billion, and
- 3% for contracts above VND 10 billion.
Commissions may be paid in two installments — 50% upon contract signing and 50% upon full payment. An additional VND 10 million bonus may be granted for deals closed within 30 days.
Example:
For a contract valued at VND 8 billion, the total commission at 2% is VND 160 million (VND 80 million paid upon signing and VND 80 million upon final payment).
SaaS (Software as a Service) Sector
This sector sells intangible products with recurring subscription contracts, where revenue depends heavily on customer retention.
Recommendation:
Commissions may be calculated based on the Annual Contract Value (ACV) — for example, 10% for new contracts and 5% for renewals. Payments can be made in stages (e.g., 50% upon contract signing and 50% upon cash collection). In addition, a VND 5 million bonus can be offered for successfully closing an enterprise-level client.
Example:
For a VND 1 billion contract, the total commission at 10% is VND 100 million (VND 50 million upon signing and VND 50 million upon receipt of payment).
Insurance Sector
Insurance products are complex financial instruments that require trust and may be subject to cancellation risks.
Recommendation:
A common structure is 15% commission on the first-year premium and 5% on renewal premiums. Additional bonuses can be provided for customer retention beyond two years.
Example:
For a first-year premium of VND 50 million, the commission is 15% = VND 7.5 million. In the second year, for renewal premiums of VND 50 million, the commission is 5% = VND 2.5 million, plus a VND 1 million bonus (2% of VND 50 million).
Tip:
Companies should invest in sales training to help employees improve client engagement and reduce policy cancellations, thereby protecting both company revenue and employee income.
Designing a compensation and commission policy for sales staff is not a simple calculation exercise — it is a strategic decision that requires a deep understanding of industry characteristics and business objectives.
If your enterprise needs expert assistance to focus on core business operations, you can contact KMC – a professional HR and payroll advisory firm with foreign investment. Hotline (Hanoi): +84 814 894 789. With nearly 25 years of industry experience, our team of specialists, well-versed in Vietnamese labor and tax law, will support you in establishing a fair, motivating, and compliant sales compensation framework.
