Pay rental sales reps a written share of each completed rental, tied to profit when reps can discount.
To pay rental reps commission, decide what the rate applies to, revenue or profit, write the rule down, and count it only on completed rentals. Pay on fixed dates, with a statement that shows every rental and the reason for every adjustment. Basing commission on profit means a discount costs the rep as well as the business.
How should you pay rental sales reps commission?
Pay a share of each completed rental under a written plan. A share of revenue is simplest; a share of profit, or of profit above a target margin, protects your price when reps can negotiate. Pay extensions to the rep who sold them, agree a split for deals reps bring in themselves, and pay on fixed dates.
- Basis
- Revenue or profit on each rental
- Counted
- On completed rentals only
- Statement
- Every line, with its reason
Should commission be a share of revenue or of profit?
A share of revenue is the easiest plan to explain, and a share of profit is the one that protects your margin when reps can discount. In luxury rental, where reps often negotiate the day rate, the difference shows up quickly. The common plans:
- Share of revenue: a percentage of the rent. Reps can work it out in their head, but a discount costs the business far more than it costs the rep.
- Share of profit: a percentage of the rent less the car's cost, such as owner pay or financing. Reps share the cost of a discount, but you have to decide how much of a car's cost they see.
- Share of profit above a target margin: the rep earns a share only of the profit above a margin you set, so a deep discount earns little or nothing.
- Flat amount per rental: simple, but it pays the same for a one-day rental and a two-week one.
What should commission be counted on?
Count commission on the rental's own price after any discount, and leave out money that isn't the rental's: deposits, taxes, tolls, tickets and other pass-through charges. Decide in the plan whether delivery fees, extra miles and damage charges count, and treat them the same way every time.
Count it when the rental is complete, not when it's booked. A booking can still be canceled, shortened or extended, and paying at booking means taking money back later. If a completed rental is refunded or corrected afterwards, the plan should say whether its commission is corrected in the next pay period.
What does a worked example look like?
Take two 3-day rentals of the same car, for example, whose cost to the business is $500 a day. One rep rents it at the full $1,000 a day, for $3,000 of rent and $1,500 of profit. Another discounts it to $700 a day, for $2,100 of rent and $600 of profit.
| Plan | Full-price rental | Discounted rental |
|---|---|---|
| 10% of revenue | $300 | $210 |
| 20% of profit | $300 | $120 |
| 50% of profit above a 30% margin | $300 | $0 |
On the full-price rental every plan pays $300. On the discounted one, the revenue plan still pays $210, while the target-margin plan pays nothing, because $600 of profit is below the 30% target of $630. These figures are for illustration only.
How should extensions, shared deals and self-generated deals be paid?
Pay each part of a rental to the rep who sold that part, and agree in advance how deals that reps find themselves are split.
- Extensions: an extension is a sale of its own. The rep who sells it earns commission on its days, even if someone else booked the first part.
- Deals that change hands: if a rep leaves or a deal moves to a colleague, decide who earns it before the pay period closes, and record why.
- Self-generated deals: a client the rep brought in from their own network, not a lead the business paid for or received. These are often paid at a higher split. Define what qualifies, and keep the lead's source with the customer so a repeat booking is counted the same way.
Should reps get a salary as well as commission?
A base salary plus commission is a common structure in rental sales, because reps also spend time on calls, deliveries, check-outs and check-ins that don't close a deal on their own. Pay the salary for the days a rep is on the team in the period, so someone who joins or leaves partway through gets the right amount.
Bonuses and deductions belong on the same statement, each with a written reason. Commission rules, pay timing and how pay is taxed are set by employment and tax law where you operate. This guide is not legal, tax or financial advice, so check your plan with an employment lawyer or an accountant.
How do you prevent commission disputes?
Give each rep a statement that shows every rental they were paid on, how each line was worked out and the reason for every adjustment. Disputes start where reps can't see the working.
- Write the plan down with a start date, and change it only from a future date.
- Use one record of rentals for the desk, the P&L and pay, not a side spreadsheet.
- Set a pay schedule with a cut-off, such as rentals completed by the period's end.
- Let each rep see their own lines, not their colleagues' pay.
How does Talara handle rep commission?
Talara's Reports & pay works out each rep's pay from the same completed rentals its reports read, set once in Settings › Rep pay. Each rep's pay is made of these lines:
- Commission: a share of the profit above a target margin, per piece of an order, so an extension pays its own seller.
- Self gen split: the rep's split of the rent charged less the car's cost, on deals they generated themselves.
- Salary: each rep's salary for the pay period, counted only for the days they're on.
- Extra and minus pay: an Administrator's adjustment with a reason the rep sees, with or without an order.
An Administrator can move an order's commission to another seller before the payout period, and each rep sees their own pay lines with the reason for every adjustment. In the CRM, each deal's lead source sits in one of three buckets, Self gen included, and the source follows the customer to their next deal. Monthly revenue goals can be set for the business and for each seller.
Rep commission, answered.
Should rental reps be paid on revenue or profit?
Revenue is simpler to explain, and profit protects your margin when reps can discount. A share of the profit above a target margin goes further, so a deep discount earns little or nothing.
When should commission be paid?
On rentals that are complete, in a set pay period with a cut-off date. Paying at booking means taking money back when a rental is canceled or shortened.
Who earns the commission on an extension?
Decide it in the plan. A clear rule is that the rep who sells the extension earns commission on its days, even when someone else booked the first part.
What is a self-generated deal?
A rental from a client the rep brought in themselves, rather than a lead the business paid for or received. These are often paid at a higher split, so define what qualifies before the first one arrives.