Question

You are offered a new position as sales representative that would pay you $25,000 plus 10% bonus for all sales over $30,000. You can expect to have sales of about $100,000 per year. Your current salary is $35,000. Which job, your current one or the new one would give you the best annual salary?

Answer 1

Current Job = $35,000

New job:
Basic Pay = $25,000
Commission = 10% of $100,000 = 0.1 x 100 000 = $10,000
Total pay = $25,000 + $10,000 = $35,000

They both pay the same. This is based on the assumption that you can achieve a sales of $100,000 a year. If you can achieve more than $100, 000 sales, then your new job will give you a better pay.