Sales commissions are payments made to salespeople based on the sales they generate. This compensation structure incentivizes employees to sell more products or services, as their earnings increase with higher sales volumes. Commissions can be a fixed percentage of sales or vary based on performance metrics. Typically, companies use sales commissions to motivate their sales teams and align their interests with business goals. This approach can lead to increased revenue for the company while providing salespeople with the opportunity to earn more through their efforts. Commonly, commissions are part of a broader compensation package that may include a base salary.