Milestone bonus is a one-time payment triggered when a salesperson or team reaches a specific performance milestone. Unlike ongoing commission, milestone bonuses are tied to achieving defined goals such as closing a certain number of deals, hitting a revenue threshold, or completing a strategic objective. According to WorldatWork (2024), 58% of sales organizations use milestone bonuses as part of their compensation plan.
Milestone bonuses offer unique motivational benefits:
According to Pavilion (2024), milestone bonuses increase the likelihood of hitting sales targets by 23%.
| Type | Trigger | Example |
|---|---|---|
| Quota milestone | Reach quota percentage | $3,500 at 100% attainment |
| Deal count milestone | Close X number of deals | $1,500 at 10 closed deals |
| Revenue milestone | Hit revenue target | $7,000 at $700K ARR |
| Strategic milestone | Complete objective | $2,000 for first enterprise customer |
| Team milestone | Team hits shared goal | $10,000 split among team at Q-target |
Annual plan with progressive milestones:
| Milestone | Requirement | Bonus |
|---|---|---|
| Milestone 1 | 50% of annual quota | $2,000 |
| Milestone 2 | 75% of annual quota | $3,500 |
| Milestone 3 | 100% of annual quota | $7,000 |
| Milestone 4 | 125% of annual quota | $14,000 |
| Maximum total | $26,500 |
Rep hits 110% attainment: Earns milestones 1, 2, and 3 = $12,500 in bonuses
| Aspect | Milestone Bonus | Commission | Accelerator |
|---|---|---|---|
| Payout | One-time payment | Per deal | Increased rate |
| Trigger | Specific goal reached | Deal closes | Above quota |
| Size | Typically larger amounts | Varies with deal | Percentage of revenue |
| Purpose | Hit specific targets | Reward all activity | Drive overperformance |
Set achievable milestones: According to Alexander Group (2024), 60-70% of reps should be able to reach the first milestone to maintain motivation.
Progressive difficulty: Make later milestones harder but with larger rewards.
Clear communication: Reps should always know how close they are to the next milestone.
Timely payout: Pay the bonus quickly after the milestone is reached for maximum motivational impact.
Typically in the pay period when the milestone is reached, or at the next regular commission calculation.
Yes. Team milestones promote collaboration and can provide bonuses split among team members based on individual contributions.
Most plans require the rep to be employed at the time of payout. Define this clearly in the commission plan.
Milestone bonuses require precise tracking of progress toward goals. With Prowi, you can set up multiple milestones, give reps real-time visibility into their progress, and automate payouts when milestones are reached.