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. For example, a real estate agent might earn a commission for each property sold, while a car salesperson may receive a percentage of the vehicle's sale price.