Commission is pay tied to sales. Instead of a fixed amount per pay period, you earn a percentage of the revenue or bookings you bring in. A commission rate of 10% on a $50,000 deal means $5,000 to you, paid on whatever schedule the plan sets: at signing, at invoicing, or when the customer pays.
Most sales roles combine a base salary with commission. The base covers the bills; the commission is the upside. The mix varies a lot: a 50/50 split is common in software sales, while some roles are nearly all commission. The plan also sets a quota, and rates often change above quota through accelerators.
The planning challenge is lumpiness. Deals close at the end of quarters, payments lag by weeks, and a great March can be followed by an empty April. Someone earning $150,000 a year on commission might see $4,000 one month and $25,000 the next. Budgeting off the average works only if the good months actually get saved.
The common mistake is spending against expected commission before it is paid, especially when a deal has verbally closed but the paperwork is not signed. Plans also have clawbacks if a customer cancels early. The safer pattern is to run monthly life off the base, hold a larger cushion than a salaried person would, and treat each commission check as an expected income event with its own date.