How commission-only sales jobs work

A commission-only sales job pays you for what you sell, not for the hours you work. There is no base salary: when a customer buys, you earn a share of the sale, and when nobody buys, you earn nothing. With the right company and the right product, it is one of the most flexible ways to earn money selling. With the wrong ones, it is unpaid work. This guide explains how the pay works, what changes when you are paid on a 1099, the questions to ask before you sign and the offers to walk away from.

What is a commission-only sales job?

In a commission-only role, your entire income comes from commissions: a percentage of each sale you close, or a fixed amount per sale. You do not receive an hourly wage, a salary or a draw against future commissions. The company gives you something to sell, sometimes with tools and leads, and pays you when a sale goes through.

Most commission-only roles in the United States are offered to independent contractors, not employees. You will see them listed as "1099 sales representative", "independent sales agent", "commission-only closer" or "outside sales, commission only". The titles change, but the deal is the same: you are paid for results.

These roles are common where one sale is worth a lot of money and the buyer is a business or a homeowner: software, solar, insurance, real estate, payment processing, marketing services and websites. The higher the value of each sale, the more room there is to pay a commission worth your time.

How commission-only pay works

Every commission plan answers the same five questions. Before you accept one, make sure you have all five answers in writing.

• The rate. A percentage of the sale, such as 20%, or a flat amount per sale. Percentages reward bigger sales; flat amounts are easier to predict.
• The amount it is calculated on. The list price, the price after discounts, or only what the customer actually pays. A 20% commission on the amount collected is very different from 20% of a list price that is often discounted.
• One-time or recurring. Some products pay once. Others, such as subscriptions and monthly services, pay you a share every month the customer stays, for a set period or for as long as the account is active. Recurring commissions are what turn a few good months into steady income.
• When you get paid. On the day the customer pays, at the end of the month or after a waiting period. Some companies hold commissions until a refund window closes.
• What happens if the customer cancels. Many plans include a chargeback, also called a clawback: if the customer gets a refund, the commission is taken back. Know how long that window lasts.

Some plans add bonuses for a first sale, for reaching a monthly target or for bringing in larger accounts. Bonuses are welcome, but judge a plan by its base commission. A generous bonus on top of a weak rate is still a weak plan.

Employee or independent contractor?

The difference matters because it decides which rules protect you. If you are an employee, federal law generally requires your employer to pay at least the minimum wage for the hours you work, even when your pay is based on commission. One exception is the outside sales exemption, which covers employees whose main job is making sales in person, away from the employer's place of business. Sales made mostly by phone or online from a fixed location, including a home office, usually do not qualify.

That is why most commission-only roles are offered as independent contractor work. As a contractor you run a small business of one: you decide your hours and your methods, you can sell for more than one company, and minimum wage rules do not apply to you. In exchange, nobody withholds taxes from your pay and you do not receive employee benefits.

A company should not control you like an employee while paying you like a contractor. If you are told exactly when to work, required to attend daily meetings, barred from other work and given a fixed schedule, ask questions. State rules on worker classification vary, and some are stricter than federal law. This is general information, not legal advice.

How taxes work when you are paid on a 1099

When you join as a contractor, the company will ask you to fill in a Form W-9 with your name, address and taxpayer number. At the end of the year, it reports what it paid you on a Form 1099-NEC once your payments pass the IRS reporting threshold. Either way, all of your commission income is taxable, with or without a form.

• Nothing is withheld. You receive the full commission and you are responsible for the taxes on it.
• Self-employment tax. On top of income tax, contractors pay self-employment tax, which funds Social Security and Medicare. The rate is 15.3% (12.4% for Social Security, up to an annual limit, and 2.9% for Medicare), calculated on most of your net earnings.
• Estimated payments. If you expect to owe $1,000 or more for the year, the IRS expects you to pay during the year, usually in four quarterly estimated payments, instead of all at once in April.
• Business expenses. You report your income and expenses on Schedule C. Costs you have because of the work, such as part of your phone and internet bill, software or the miles you drive to meet clients, can reduce the profit you pay tax on.

A simple habit keeps this under control: set aside a share of every commission in a separate account the day it arrives, and keep a spreadsheet of what you earn and spend. A tax professional can tell you how much to set aside in your situation. This is general information, not tax advice.

Are commission-only sales jobs worth it?

For the right person, yes. Commission-only work rewards people who enjoy conversations, can handle hearing no and are organized enough to follow up without anyone checking on them. There is no ceiling set by an hourly rate, you choose when and where you work, and you can start alongside another job.

The trade-off is risk. Your first weeks may bring little or no income while you learn the product and build a pipeline. Income goes up and down from month to month. If you need a fixed amount every two weeks to pay your bills, start part time and keep your current income until your commissions are steady.

Ask yourself three questions before you start. Do you believe the product is worth what it costs? Would you be comfortable explaining it to a friend who owns a business? Can you give it a few hours every week for at least three months? If the answer to all three is yes, commission-only work is worth trying.

What sells well on commission

Not every product makes a good commission job. The ones that work best share a few traits:

• A clear need. The buyer already knows they have a problem, or you can show it to them in a minute.
• Enough value per sale. A commission on a $20 product rarely pays for the time it takes to sell it. A share of a sale worth thousands of dollars does.
• Recurring revenue. Monthly services pay you again after the first sale.
• Someone else delivers it. Your time goes into selling, not into building, installing or supporting the product.
• A short decision. Products a small business owner can approve alone close faster than products that need a committee.

Websites for local businesses tick every box. Almost every business needs one, many still have none or have one that is broken or out of date, the owner usually decides alone, and the sale often includes monthly services such as reviews or a managed Google Business Profile. To see how those conversations go, read how to sell websites to local businesses.

Questions to ask before you sign

A serious company answers these questions in writing without hesitation. A vague answer is an answer too.

• What is the commission rate, and is it calculated on the list price or on the amount the customer pays?
• Do I earn on monthly services or renewals, and for how long?
• When exactly am I paid, and how? Is there a minimum before a payout?
• What happens to my commission if the customer cancels or asks for a refund, and for how long can it be taken back?
• Do you provide leads, or do I find my own? Do I pay anything for leads, tools or training?
• Is there a territory, an exclusivity clause or a non-compete?
• Who delivers the product and supports the customer after the sale?
• Where do I see my sales, my pending commissions and my payments?
• What happens to commissions on sales I closed if I stop working with you?
• Can I talk to someone who has sold for you for more than six months?

Red flags to walk away from

Most commission-only offers are legitimate. The ones that are not tend to look alike. Walk away if you see any of these:

• You have to pay to start. A sign-up fee, a mandatory starter kit, paid training or inventory you must buy. A company that earns when you sell has no reason to charge you to join. The Federal Trade Commission warns about offers that ask for money up front in exchange for a business opportunity.
• The money comes from recruiting. If you earn more for bringing in other sellers than for selling to real customers, it may be a pyramid scheme.
• Income promises. Guaranteed earnings, screenshots of huge checks or "unlimited income" with no explanation of how commissions are calculated.
• Nothing in writing. No agreement, or an agreement that does not state the rate, the payment date and the refund rules.
• You cannot see your numbers. No dashboard, no statement, no way to check which of your sales were paid.
• A product you would not buy. If you would be embarrassed to sell it to someone you know, your customers will feel the same way.

Where to find commission-only sales work

Large job boards let you search for commission-only and 1099 roles, and there are marketplaces built for independent sales agents and the companies that work with them. Online communities for salespeople and for side income also share openings. Wherever you find an offer, check the company before you apply: look at its website and products, read reviews from customers and from former sellers, and look up the people who run it.

The best roles are often the ones where you can see the full picture before you join: the commission plan, the product, the prices and the tools you will use, published openly instead of revealed after three interviews.

How commission works at Good Sites Only

Good Sites Only is a program for people who want to sell websites without building them. You talk to local businesses; our studio designs and builds each site in 7 days.

• 20% of every site you sell. Our list prices are $3,000, $5,000 and $8,000, depending on the size of the site, so at list price your commission is $600, $1,000 or $1,600 per sale.
• 10% of monthly services during the first year. When your client keeps services such as reviews or a managed Google Business Profile, you earn 10% of them every month for the first year.
• Paid the day we get paid. Your commission is paid the same day the client's payment comes in.
• Businesses to call, every day. Your panel brings you local businesses that need a website, with what to tell each one, so your time goes into conversations instead of research.
• No fee to join. There is no base salary and nothing to buy.

Launch offer for founding sellers: the first 20 sellers we approve earn 25% of every site for their first 12 months, plus $200 when they close their first sale. 20 of 20 places left.

Everything is published on the partner program page, including the prices you will quote and how payments work. If it sounds like a fit, apply to the partner program.

Questions about commission-only sales jobs