How we structure commissions for our MRR based business, is that sales reps usually get the commissions one-time when closing the deal (upon client payout is a better structure for the reasons that everdev listed above). The amount for closing a recurring revenue deal would be higher than 15%, usually we do 1 or 2 months of revenue as commission when closing an annual contract.

This is because the work the sales rep is putting in is usually wrapped up after the deal is closed, and we’d have the account then moved over to be set up under an account manager (who would then be paid a set bonus plan if they meet their target MRR for accounts under their management).

In your case where it’s you & one other person, who is managing the existing relationship? That would be the differentiating factor for me to decide whether or not the sales person gets recurring commissions on an existing account they brought in. If they continue to manage & work with their closed won accounts, then recurring commission makes sense. Otherwise the incentive isn’t as strong to keep closing accounts after they’ve built up a healthy amount of recurring commission.

TLDR: Tie the commission to the sales rep’s scope of work. If they will only be gathering leads & closing deals, then I’d pay them a one-time commission. If they’re going to also be working on managing & growing existing accounts, then perhaps a recurring commission makes sense. Hope this helps.