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Non-Recoverable Draw
A guaranteed minimum the rep keeps regardless of future commission performance - usually during ramp.
Draws & Guarantees
Beginner
How it works
A guarantee paid in addition to (or in lieu of) commissions during a ramp period. The rep keeps the full guarantee even if commissions never reach the draw level. Standard practice for new AEs during their first 3-6 months.
Formula
Total = max(draw, commission). Draw paid in addition during ramp window in some plans.
Worked example
Example. $4K/mo non-recoverable draw for 6 months ramp. Rep earns $1K in commission month 2 → keeps $4K. Rep earns $7K in commission month 5 → keeps $7K (or $7K + draw if additive).
Pros & cons
Pros
- Reduces new-hire flight risk
- Aligns ramp with realistic productivity curve
- Easy to explain
Cons
- Direct expense to the company
- Sometimes mis-applied as a permanent floor
Best for
- New AE ramp
- Mid-cycle territory transitions
- Roles with material learning curves