Category: Sales

September 10, 2025

Learn how roofing companies structure payouts, from commissions and draws to bonuses and fees, and how automation keeps everything accurate and transparent.

Designing the right commission structure is one of the most impactful business decisions a roofing company can make. A good plan attracts top sales talent, motivates reps to maximize profit—not just revenue—and ensures that the business stays healthy. 

A poor plan, on the other hand, creates conflict, encourages discounting, and often leaves both salespeople and owners frustrated.

In this commissions guide, we’ll cover:

• The most common roofing commission models, explained with clear examples.
  
• The payout types and calculation methods contractors use.
  
• How Contractors Cloud eliminates spreadsheets and mistakes with industry leading commission management and payout features.
  

If you’re looking to create or refine your roofing commission plan, this resource will give you the building blocks, implementation, and management tools.

Why roofing commission structures matter

Roofing is a sales-driven business. Most companies rely heavily on sales representatives, canvassers, and project managers to generate new jobs and close deals. Because roofing contracts often involve high dollar amounts and multiple payments, commissions are both a big motivator and a big expense.

Your commission plan needs to:

• Reward top performance without eroding profitability.
  
• Protect cash flow by aligning payouts with actual collections.
  
• Stay flexible enough to cover retail, storm, insurance supplement, and service work.
  
• Be clear and transparent, so reps trust the system.
  

Common roofing company commission models

Let’s walk through the commission models that roofing companies commonly use.

1. Percentage of Total Revenue

How it works: The rep earns a flat percentage of the total contract amount or collected revenue.

Example:

• Contract value = $20,000
  
• Commission rate = 10%
  
• Rep earns $2,000 commission.
  

Best for: Simplicity. Great for new or smaller companies where margins are steady.

Caution: Doesn’t account for profit. A job sold with deep discounts could cost the company money, but the rep still gets paid.

2. Percentage of Gross Profit

How it works: Commission is tied to the profitability of the job. Gross profit = Contract value – Direct costs.

Example:

• Contract value = $20,000
  
• Job costs = $12,000
  
• Gross profit = $8,000
  
• Commission rate = 25% of GP = $2,000 commission.
  

Best for: Aligning sales behavior with profit. Reps protect pricing and upsell premium options because their pay is linked to margin.

Caution: Requires accurate, real-time job costing to avoid disputes.

The 10/50/50 Split

A common structure for roofing company commissions is the 10/50/50 split. This plan involves taking 10% of the total sales revenue to reimburse overhead. Then the cost of materials and labor is deducted from the remaining 90%, and the net profit is equally shared between the salesperson and the company. 

3. Tiered Commission Plans

How it works: Reps earn higher rates as they hit volume or margin thresholds.

Example (margin-based):

• < 35% margin → 20% of GP
  
• 35–45% margin → 25% of GP
  
• 45% margin → 30% of GP
  

If a rep sells a job at 42% margin ($8,000 GP), they earn 25% × $8,000 = $2,000.

Best for: Encouraging reps to aim for higher-margin jobs instead of chasing volume with discounts.

4. Split Commissions

How it works: Commission pools are divided between multiple team members, such as setter/closer or rep/project manager.

Example: $2,000 commission pool split 30%/70% = $600 to setter, $1,400 to closer.

Best for: Larger sales teams with multiple roles.

5. Milestone or Progress-Based Commissions

How it works: Commissions are split into stages tied to contract signing, installation, and final payment.

Example:

• Total commission = $2,000
  
• 30% at contract signed = $600
  
• 40% at installation complete = $800
  
• 30% at job paid-in-full = $600
  

Best for: Protecting company cash flow and reducing risk of chargebacks.

6. Draw Against Commission

How it works: Reps receive an advance or “draw” that is later reconciled against earned commissions.

Example:

• Rep receives $2,000 draw.
  
• Earned commission = $2,500.
  
• Net payout = $500 after draw is cleared.
  

Best for: Smoothing income for new hires or off-season periods.

7. Bonuses and SPIFFs

How it works: One-time payouts for hitting goals or selling add-ons.

Examples:

• $500 bonus for selling $100k+ in a month.
  
• $200 SPIFF for each premium underlayment upgrade.
  
• $100 bonus for a 5-star Google review mentioning the rep.
  

Best for: Driving specific short-term behaviors and outcomes.

8. Straight Fees

How it works: Flat fees paid for specific roles or contributions.

Example: $500 canvasser fee for each signed job.

Best for: Setters, canvassing teams, or referrals.

Managing and automating payouts in Contractors Cloud

Once you arrive at the best commission structure(s) for your sales team, Contractors Cloud can help you manage, track, and automate payouts perfectly.

Roofing companies often combine different payout types and calculation methods to match their business model.

Instead of messy spreadsheets, Contractors Cloud provides a robust commission engine built for roofing companies. Using the endless combinations listed below, your roofing company can create, manage, and automate payouts in a commissions system that is customizable, fair, and efficient.

• Create rules: Choose payout type and calculation method.
  
• Add conditions: Define ranges, milestones, and requirements.
  
• Assign employees: Apply plans per role, rep, or tenure.
  
• Automate payouts: Commission runs calculate everything in seconds.
  
• Log results: Every payout is visible, auditable, and tied to the project.

Creating Payout Rules

It all starts with creating a Payout Rule that designates the rules, percentages, and details you need to manage and payout commissions. The rule starts with being centered on the payout type.

Payout Types

• Company Overhead (off the top): Deduct overhead before calculating commissions.
  
• Draws: Advances against commissions.
  
• Commissions: Percentage of revenue, profit, or ticket value.
  
• Bonuses: Flat or conditional payouts.
  
• Fees: Flat payments (e.g., canvasser fee).

Payout Type Popularity

When we look at how ~1,900 roofing companies in Contractors Cloud structure their payouts, commissions dominate the landscape. Of all payout types, commissions account for 54% of usage (1,026 setups), making them the most popular way to compensate sales reps. Company overhead is the next most common at 26% (494), showing how many contractors calculate profit-based payouts after fixed costs are removed. Draws make up 11% (213), while bonuses represent 5% (92) and flat fees just 2% (45).

This breakdown highlights that while commissions are by far the primary method, companies are also layering in overhead, draws, and performance incentives to create compensation plans that fit their business model.

Commission calculation methods (with examples)

Once you select your Payout Plan type, your rule needs its calculation method. Here are the methods available in Contractors Cloud with an example of how they would calculate.

• % of actual gross profit: $20,000 revenue – $12,000 expenses = $8,000 GP × 20% = $1,600.
  
• % of down payments: 9% of $5,000 down payment = $450.
  
• % of all payments: 9% of $20,000 = $1,800.
  
• % of progress payments: 9% of $10,000 progress payment = $900.
  
• % of each payment: Apply percentage per individual payment event.
  
• % of net profit: $8,000 GP – $3,000 overhead = $5,000 net × 20% = $1,000.
  
• % of total revenue (adjusted): $20,000 – $1,000 credits = $19,000 × 10% = $1,900.
  
• % of total ticket items (incl. pending): Includes supplements awaiting approval.
  
• % of total ticket (approved only): Excludes pending items.
  
• Straight fee: Flat payout, e.g., $500 finder’s fee.
  

Setting Conditions

Conditions allow roofing companies to make commission rules dynamic. Examples include:

• Pay 20% of GP if margin is 30–35%, but 30% if margin > 40%.
  
• Only pay if the contract is marked “Paid in Full.”
  
• Require all job expenses entered before GP- or net-profit-based commissions run.
  
• Apply different rules depending on rep seniority (e.g., junior vs. senior sales reps).
  
• Handle multiple reps per project with automatic split commissions.
  

Conditions ensure commissions are fair, accurate, and tied to the company’s priorities.

Applying Rules to Employees

Commission plans aren’t one-size-fits-all. Contractors Cloud allows companies to:

• Apply different rules for senior vs. junior reps.
  
• Set unique plans for canvassers, closers, and project managers.
  
• Assign payout rules per employee or per role.
  

This flexibility makes it easy to scale without confusion.

Logging and Transparency

Every commission payout is automatically logged in Contractors Cloud. This gives companies:

• A clear record of all payouts.
  
• Project-level transparency (which commissions have been paid vs. pending).
  
• An audit trail for disputes or adjustments.
  

For sales reps, this builds trust. For owners, it provides accountability.

Payouts / Commission Report

The Payouts / Commission Report enables you to see all of your commissions payouts by their status, project, date, employee, and amount. It’s a centralized, easy, and sortable way to track your commission payouts.

Draw Accounts

A draw account provides sales representatives with a steady income stream by advancing money against their future commissions, essentially working as a short-term loan that is automatically reconciled once commissions are earned. This approach is especially helpful for new reps ramping up in the role or during slower sales periods when income may fluctuate. 

Contractors Cloud allows you to fully manage the draw process with ease so that payouts are kept smooth and transparent while tracking the funds advanced and the deductions once commissions are earned. 

A draw example would be, if a rep receives a $2,000 draw in January and then earns $2,500 in commissions in February, $2,000 is applied to pay back the draw and the rep receives the remaining $500. Contractors Cloud makes managing draw accounts simple by integrating them directly into the Payouts/Commissions Report as well as the Accountant and Sales Manager Dashboards, giving both leadership and sales teams full transparency into balances, deductions, and payouts.

Commissions and payouts FAQs

Q: Should I pay roofing reps on revenue or profit?
A: Profit-based commissions protect your margin, but revenue-based is simpler. Many companies use a hybrid or tiered approach.

Q: How do you handle supplements in roofing commissions?
A: Define whether supplements are included in total revenue or treated as separate ticket items with their own percentage.

Q: How do you pay setters or canvassers?
A: Many companies use flat fees ($500/job) or a smaller percentage split from the total commission pool.

Q: What’s the best commission plan for new sales reps?
A: Draws or base + lower commission percentage help stabilize income while new reps ramp up.

Roofing sales commissions mastered

Roofing sales commissions don’t have to be a headache. With the right structure, you can:

• Motivate reps to sell profitably.
  
• Protect your company’s cash flow.
  
• Simplify payroll and eliminate disputes.
  

Contractors Cloud makes it easy to design, apply, and automate even the most complex commission rules—per employee, per job, or per payment type.

When commissions are clear, fair, and automated, your reps focus on selling, not fighting over spreadsheets—and your business grows with confidence.

Ready to simplify commissions? Schedule a demo of Contractors Cloud today and see how easy it is to automate payouts, protect margins, and keep your sales team motivated.