An incentive payout is the person's variable amount multiplied by the plan's overall payout percentage, which is the weighted sum of each goal's payout percentage after its payout rules. This is the formula behind every bonus, commission or variable pay amount that an incentive plan sends to payroll.

Before you start

• The plan must have goals with weights that add up to 100%.
• Each person needs a variable compensation with an Amount up to value on their contract.

The calculation in four steps

For each period and each person in the plan:

1. Achievement per goal. Factorial reads each goal's progress for the plan period: (current value − start value) ÷ (target − start value) × 100. Below 0% counts as 0%. There's no upper limit, so 120% is possible.
2. Payout per goal. The goal's payout rules turn its achievement into a payout percentage. A goal without payout rules pays exactly its achievement.
3. Overall payout percentage. Each goal's payout percentage is multiplied by its weight, and the results are added up. This is the Overall achievement in the People tab.
4. Amount. The person's Amount up to value × the overall payout percentage. This is the Amount to pay.

Worked example 1 — Two goals, no payout rules

Ana's contract has a variable compensation of Amount up to €4,000 every 3 months. Her quarterly plan has:

Ana's Q1 payout is €4,000 × 68% = €2,720. In the Payout breakdown, Revenue shows Payout % 48% and Amount €1,920, and Customer retention shows 20% and €800.

Worked example 2 — Threshold and cap

Same goals and amount. Revenue has payout rules 0–80 Fixed percentage 0% and 80–120 Matches achievement. Customer retention has no rules.

Ana's Q2 payout is €4,000 × 102% = €4,080, which is more than her Amount up to value because Revenue was over-achieved.

If Revenue had reached only 78% in Q2, its payout would be 0% (below the 80% threshold), the overall payout would be 0% + 30% = 30%, and the amount €1,200.

Worked example 3 — Two people on the same plan

Ana (Amount up to €4,000) and Ben (Amount up to €2,500) are on the same plan with an overall payout of 68%. Ana gets €2,720 and Ben gets €1,700. The percentage is the same because goal results are shared by everyone in the plan.

Rules and behavior

• If a goal has no target period with exactly the same start and end dates as the plan period, then its achievement is 0%.
• If a goal's current value or target is missing for the period, then its achievement is 0%.
• If a goal is measured by its sub-goals, then its achievement is calculated from the sub-goals' combined values for the period.
• If a goal's achievement is negative, then it counts as 0%.
• If the overall payout percentage is above 100%, then the amount is above the person's Amount up to value.
• If a period hasn't been sent to payroll, then the calculation is an estimate that follows the goals' current progress.
• If a period is sent to payroll, then the achievement, payout percentage, weight and amount of each goal are saved with the payout and never change afterwards.
• Payout percentages are rounded to two decimals and amounts to the cent.

Limitations

• The calculation can't use a person's individual contribution to a shared goal.
• The amount can't be capped at the Amount up to value automatically. To cap it, use payout rules that cap each goal at 100%.
• The calculation can't use goal results from a different period, for example year-to-date results in a quarterly plan.

Troubleshooting

• Symptom: "The payout is higher than the variable amount." → Cause: A goal was over-achieved and its payout rules don't cap it. → Fix: Add a cap in the payout rules for the periods not yet sent.
• Symptom: "A goal counted as 0% even though it had progress." → Cause: The goal has no target period that exactly matches the plan period, or no current value. → Fix: Align the goal's frequency and target periods with the plan's Recurrence.
• Symptom: "The overall achievement isn't the average of the goals." → Cause: The overall percentage is weighted and goes through each goal's payout rules. → Fix: Open See payout breakdown to see each goal's contribution.

FAQ

1. Why is the payout 68% when my goals were 80% and 50%?

Because the goals have weights. With 60% and 40% weights: (60% × 80%) + (40% × 50%) = 68%.

2. Can the bonus be more than my variable amount?

Yes, if goals are over-achieved and the payout rules don't cap them.

3. Does the plan use my personal progress?

No. The goal's overall result counts for everyone in the plan.

4. When is the amount final?

When an admin sends the period to the payroll cycle. Until then it's an estimate.

5. Where do I see the calculation for one person?

Admins open See payout breakdown in the plan's People tab. In the payroll cycle, hovering the incentive amount shows the plan, the payout percentage and each goal with its weight.