A commission-based system is a payment structure where individuals earn money based on the sales they generate or the services they provide. This model is commonly used in industries like real estate, sales, and finance, where employees or agents receive a percentage of the revenue from their transactions. In this arrangement, the more successful an individual is at closing deals or attracting clients, the higher their earnings. This incentivizes performance and can lead to higher income potential compared to a fixed salary, making it appealing for those who are motivated and skilled in their field.