Getting SDR compensation right is one of those things that seems simple on paper but gets messy fast in practice. I’ve seen companies nail it and watched others fumble badly. The difference? Understanding that a good comp plan isn’t just about paying people fairly—it’s about designing a system that drives the exact behaviors you want to see.
Here’s the thing about SDRs: they’re early in their careers, motivated by both money and growth, and they’re doing one of the hardest jobs in sales. Get their compensation wrong, and you’ll hemorrhage talent faster than you can hire. Get it right, and you’ll build a team that not only hits quota but actually enjoys the challenge.
Compensation Philosophy: Keep It Simple, Make It Work
Before we dive into numbers and structures, let’s talk philosophy. Your comp plan should be simple enough that an SDR can calculate their earnings in about 30 seconds. If they need a spreadsheet and a calculator to figure out what they’ll make this month, you’ve already lost.
Good compensation plans share a few characteristics. They’re dead simple to understand—your newest rep should be able to explain it to their roommate over dinner. They drive the right behavior, meaning if an SDR does exactly what the comp plan incentivizes, they’re doing exactly what’s good for the business. The targets need to be achievable because nothing kills motivation faster than impossible quotas. There should be meaningful rewards for over-achievement, and the whole package needs to be competitive enough that your best people aren’t constantly fielding recruiter calls.
The mistakes I see most often? Plans so complex they need a user manual. Conflicting incentives where reps have to choose between quality and quantity. Quotas set so high that only your top performer has a shot at hitting them. No upside for crushing it beyond 100 percent. And pay that’s 20 percent below market because the founder read an article about “passion over paychecks.”
Understanding SDR Compensation Components
Let’s break down how SDR pay actually works. You’ve got three main pieces: base salary, variable pay, and OTE (on-target earnings). OTE is what an SDR makes when they hit 100 percent of quota—it’s the number you put in job postings and what candidates compare.
Base Salary: The Foundation
Base salary is the stable part that covers rent, groceries, and student loan payments. For 2025, here’s what the market looks like. Entry-level SDRs with no prior sales experience typically make between 40K and 50K base. Someone with one to two years of solid SDR experience is looking at 50K to 65K. Senior SDRs who’ve been crushing it are in the 60K to 75K range, and team leads or player-coaches who manage a few SDRs while still carrying a quota land somewhere between 65K and 80K.
Geography matters more than you’d think. San Francisco and New York City? Add 20 to 30 percent to those numbers because a studio apartment costs what a mortgage does in most of the country. Other major metros like Austin, Boston, or Seattle typically add 10 to 15 percent. Remote positions often come in 10 to 15 percent below market, which honestly makes sense when you factor in the lifestyle benefits and cost savings.
Variable Pay: The Motivation Engine
Variable pay is where things get interesting. This is the performance-based portion that should make up between 25 and 35 percent of total OTE. It’s almost always based primarily on meetings booked, with some quality adjustments we’ll discuss later. Most companies pay this monthly to keep the feedback loop tight.
Let’s walk through a realistic example. Say you’ve got an SDR with a 70K OTE. If you’re doing the standard 70/30 split, that’s 49K base and 21K variable. Break that variable down monthly and you’re looking at about 1,750 dollars per month when they hit quota. That’s real money—enough to matter, but not so much that the base can’t cover basic living expenses.
OTE Ranges by Experience Level
For entry-level SDRs, expect total OTE between 55K and 70K, usually with a 75/25 base to variable split. They’re learning, so you want that base a bit higher for stability. Experienced SDRs with a proven track record typically land at 70K to 85K OTE with a 70/30 split. Senior SDRs who handle enterprise accounts or complex sales cycles can hit 85K to 100K OTE, also at 70/30.
To actually earn that OTE, an SDR needs to hit 100 percent of their quota with all quality metrics met. Miss quota and the variable drops proportionally. This is important to explain clearly during hiring because some candidates hear “70K” and think that’s guaranteed.
Designing Variable Compensation That Actually Works
Now we get to the heart of it: how to structure variable pay so it drives the right behavior without creating perverse incentives.
Meetings Booked: The North Star Metric
Most SDR comp plans revolve around meetings booked, and for good reason. SDRs directly control this metric—it’s not dependent on AE performance or product-market fit. It’s clear and measurable with no room for interpretation. It aligns perfectly with what SDRs are hired to do, and it’s easy to track in any modern CRM.
But here’s the critical part: your meeting definition matters enormously. I’ve seen teams where “booked” means it’s on the calendar, and others where it only counts if the prospect actually shows up and qualifies. You need crystal clear criteria. The prospect needs to have attended—no-shows don’t count. They need to meet your ICP criteria, or you’ll incentivize garbage meetings. It should be a meaningful conversation, typically 15 minutes minimum. And ideally, the AE confirms the prospect is actually qualified.
Without these guardrails, you’ll have SDRs booking anything that moves just to hit quota.
Adding Quality Components
Pure volume metrics can create problems. Sure, you want quantity, but not at the expense of quality. Here are three ways to layer in quality without making the plan too complex.
The first option is a show rate bonus. Let’s say your base variable is 100 dollars per meeting. You could add a tiered bonus based on show rates. Below 70 percent show rate? No bonus—you’re booking low-quality meetings. Between 70 and 80 percent? Add 25 dollars per meeting. Between 80 and 90 percent? Add 50 dollars. Above 90 percent? Add 75 dollars per meeting. This approach keeps SDRs honest about meeting quality without making the math complicated.
Option two is an SQL rate multiplier. Same 100 dollar base per meeting, but now you apply a multiplier based on how many meetings convert to sales-qualified leads. If fewer than 50 percent of your meetings qualify, you get an 0.8x multiplier—you’re wasting AE time. Between 50 and 70 percent? Standard 1.0x rate. Between 70 and 80 percent? 1.2x multiplier. Above 80 percent? 1.4x multiplier. This directly rewards SDRs who focus on the right prospects.
The third option is a blended approach where 70 percent of variable is based purely on meeting volume and 30 percent is based on a quality score that factors both show rate and SQL rate. This works well for more mature teams that have good data on these metrics.
Accelerators: Rewarding Over-Achievement
Here’s where you separate good comp plans from great ones. Accelerators are higher commission rates that kick in when an SDR exceeds quota. They’re critical for retaining top performers who would otherwise max out their earnings at 100 percent.
A typical accelerator structure looks like this: at 100 percent of quota, you earn the standard rate—let’s say 100 dollars per meeting. Between 100 and 120 percent of quota, you earn 1.5x rate, or 150 dollars per meeting. Above 120 percent of quota, you earn 2x rate, or 200 dollars per meeting.
Let’s see how this plays out. Imagine your quota is 15 meetings per month and you book 20. Your first 15 meetings earn the standard 100 dollars each for 1,500 dollars. Your next three meetings (taking you from 101 to 120 percent of quota) earn 150 dollars each for 450 dollars. Your last two meetings (above 120 percent) earn 200 dollars each for 400 dollars. That’s 2,350 dollars total instead of the 1,500 you’d earn at exactly 100 percent of quota.
That extra 850 dollars matters. It keeps your best performers motivated and makes them think twice before jumping ship to that recruiter promising an AE role.
Decelerators: Handle With Care
Some companies include decelerators—reduced rates for performance below quota. For example, if you hit less than 75 percent of quota, your variable pay might be reduced by 50 percent. Between 75 and 100 percent, you earn the full rate.
I’m personally cautious about decelerators. Yes, they create urgency and discourage sandbagging. But they can also crush morale during tough months and create a death spiral where struggling reps give up entirely. Use them sparingly, if at all.
Real-World Comp Plan Examples
Let me show you what these plans look like in practice for different experience levels.
Entry-Level SDR Plan
Take a new SDR fresh out of college. You might give them a 45K base salary (3,750 per month) plus a 15K variable target (1,250 per month) for a 60K OTE. Set their quota at 12 meetings per month.
For variable structure, pay 100 dollars per qualified meeting with a 25 dollar show rate bonus if they maintain above 80 percent show rate. Add modest accelerators—1.3x for 100 to 120 percent of quota and 1.5x above 120 percent. Keep it simple because they’re learning.
Quality criteria should be straightforward: prospect attended, met ICP definition, and AE confirmed they’re qualified. That’s it. Don’t overcomplicate things for someone in their first quarter.
Experienced SDR Plan
For someone with a track record, step everything up. Base salary of 55K (4,583 per month), variable target of 25K (2,083 per month), and 80K OTE. Quota jumps to 18 meetings per month because they know what they’re doing.
Pay 110 dollars per qualified meeting with a quality multiplier. If they maintain both above 80 percent show rate AND above 70 percent SQL rate, they get a 1.2x multiplier. Hit one of those benchmarks? Standard 1.0x. Hit neither? 0.8x multiplier.
Accelerators get more aggressive—1.5x for 100 to 120 percent of quota and 2x above 120 percent. These reps should have real earning potential if they perform.
Senior Enterprise SDR Plan
At the senior level, especially for enterprise SDRs, the economics change. Base salary of 70K (5,833 per month), variable target of 30K (2,500 per month), and 100K OTE. But quota drops to 10 meetings per month.
Wait, lower quota? Yes, because enterprise meetings are harder to book and worth more. You’re paying 250 dollars per qualified meeting instead of 100 or 110. You might even add a pipeline kicker—say, 5 percent of pipeline value created from their meetings.
Same aggressive accelerators: 1.5x for 100 to 120 percent and 2x above 120 percent. Quality criteria gets more stringent: meeting must be held (no-shows definitely don’t count), enterprise ICP confirmed, and ideally multiple stakeholders in the room.
SPIFFs and Bonuses: Adding Some Spice
Beyond base comp, SPIFFs (Sales Performance Incentive Funds) and bonuses add energy and drive specific behaviors. Think of them as the hot sauce on an already good meal.
Daily SPIFFs create immediate wins. First meeting of the day? Extra 25 dollars. Meeting booked from a cold call instead of email? Extra 50 dollars. These are small enough not to distort behavior but meaningful enough to create excitement.
Weekly SPIFFs build friendly competition. Most meetings booked this week wins 200 dollars. Most improved over last week gets 100 dollars. Perfect show rate for the week? Another 100 dollars. Maybe the winner rings a bell and picks where the team orders lunch on Friday.
Monthly SPIFFs tie to bigger achievements. Hit quota for the month? 500 dollar bonus. Entire team hits quota? Team dinner or outing. Top performer? 1,000 dollar bonus and public recognition.
Quarterly and annual bonuses reward consistency and longevity. Hit quota all three months in a quarter? 1,000 dollar bonus. Be a top performer for the year? President’s Club trip. These longer-term incentives help with retention.
Setting Quotas That Make Sense
Quotas can make or break your comp plan. Set them too high and nobody hits them, destroying morale. Too low and you’re overpaying for mediocre performance.
Start with historical data. If your average SDR books 16 meetings per month, your top performer hits 22, and your bottom performer struggles to get 10, where should you set quota? I’d recommend around 15 meetings—roughly the 80th percentile of achievable performance. You want 60 to 70 percent of your team hitting quota consistently. If fewer than half your team is hitting quota, the quota is wrong, not the team.
Don’t forget about ramping. New SDRs shouldn’t have full quota on day one. A typical ramp looks like this: month one is 0 to 25 percent of quota (they’re learning systems and messaging), month two is 50 percent, month three is 75 percent, and month four onward is 100 percent.
When market conditions change, adjust quotas accordingly. Maybe you shifted ICP, launched a new product, or noticed seasonal patterns. But communicate changes in advance, explain the reasoning clearly, apply adjustments fairly across the team, and never change quotas mid-period. Nothing kills trust faster than moving the goalposts after the game started.
Comp Administration: The Unsexy But Critical Stuff
You can design the perfect comp plan, but if you screw up administration, it falls apart.
Pay variable compensation as quickly as possible. Immediacy reinforces behavior—there’s a huge difference between getting a commission check the week after you book a meeting versus three months later. Most companies pay monthly, but if you can do same-month or even bi-monthly payouts, do it.
Give reps real-time visibility into their performance. Every SDR should have a dashboard showing meetings booked versus quota, current show rate, current SQL rate, variable earned so far, and projected payout for the period. No surprises. No black boxes.
Have a clear dispute resolution process. Sometimes an SDR books a meeting they believe qualifies, but it doesn’t count toward quota. Maybe the prospect showed up but wasn’t ICP. Maybe the AE dropped the ball and never held the meeting. You need a process: rep submits a specific dispute with details, manager reviews within 48 hours, decision gets documented, adjustment happens if warranted, and there’s an escalation path if still unresolved.
Common Compensation Mistakes to Avoid
Let me save you from the mistakes I see repeatedly.
Mistake one: overcomplexity. If your comp plan requires a 30-minute explanation and a spreadsheet to understand, it’s too complex. Simplify until a new hire can explain it to their friend at a bar.
Mistake two: conflicting incentives. Don’t comp equally on both volume and quality—you’re asking reps to choose between them every day. Pick one primary metric with a quality modifier.
Mistake three: unachievable quotas. If less than 30 percent of your team hits quota regularly, your quotas are too high. Period. Reset them.
Mistake four: no accelerators. Without meaningful upside for over-performance, your best reps will coast at 100 percent or leave for better opportunities.
Mistake five: constant changes. Changing comp plans every quarter destroys trust and makes planning impossible. Commit to annual comp plans with only minor tweaks if absolutely necessary.
Key Takeaways
Getting SDR compensation right matters more than most founders realize. A well-designed comp plan doesn’t just attract talent—it actively shapes behavior, drives performance, and keeps your best people engaged.
Stick to the fundamentals: 70 to 75 percent base and 25 to 30 percent variable keeps things stable while maintaining motivation. Make meetings booked your primary metric because SDRs control it directly. Layer in quality components like show rate or SQL rate to prevent gaming, but keep it simple. Include accelerators that meaningfully reward over-achievement—your top performers need upside. And above all, keep the plan simple enough that everyone understands it without a PhD in compensation design.
Pay well, pay simply, pay fairly. That’s the formula.
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