Software sales representatives have extremely high earning potentials. As a rep moves up the ranks from business development representative to enterprise account executive, how much software sales reps earn increase exponentially. And even from the beginning of their careers, they have the opportunity to earn well into six figures, as long as they put in the effort.
I remember listening to “Money” by Pink Floyd as I walked to my first SaaS sales job as a BDR in NYC thinking about all the money I could make if I just put myself out there, following the process, and made those dials. The first few quarters were rough and didn’t live up to the image I held in my mind while jamming out. I failed to breach quota twice. But, as I gained skills through practice, I finally made a breakthrough.
By quarter three I brought in my first double-digit commission check, and it felt great, especially since this was my first job out of college. Seriously, once you get your footing and become proficient at the job, even as a low-level BDR, you can start earning a lot more than the majority of starting-level positions.
Now, how much you can make as a software sales representative depends on a couple of factors, including:
- Your Location: Tech capitals like San Francisco, Austin, and NYC often offer the highest earning potential.
- Your Position: Enterprise Account Executives who deal with big accounts often earn the most.
- Your Company Size: Often larger, more established companies are able to offer better salaries and compensation plans than startups.
- Your Years of Experience: The more years under your belt the more leverage you have in employment contract negotiations.
- How Hard and Often You Work: Because of commission, the more you put into this job the more money you make.
The beautiful thing about working in software sales is that your pay is at least partially determined by your skill, effort, and time invested. This self-determination is often not found in other jobs where you’re confined to earning your base salary no matter how hard and smart you work.
What Makes Up a Software Sales Rep’s Earnings?
Before going into how much software sales reps earn, let’s look at the building blocks of their take-home pay. A software sales rep’s earnings generally consist of base salary + commission + any profit-sharing + bonuses. Let’s go over each element.
- Base Salary: This is safe money. It’s how much you’ll earn regardless of your performance. Typically, this is the number employers will show you when they offer you a job. Compensation plans are often private.
- Commission: This is a percentage of the revenue you close. A common number is 10% of the revenue you close. Most companies offer kickers too, where the commission rate increases exponentially as you go higher above quota. At 110% percent of quota you might earn 12% of the revenue closed on the deal. Then at 120% you might earn 15%. This is why it’s so fun to be working while above quota.
- Profit-Sharing: This is a compensation plan that awards you a percentage of the company’s profits.
- Bonuses: Some companies will gift you bonuses randomly or because you hit a certain threshold. This is typically the smallest portion of the earnings makeup.
So, a software sales rep’s base salary might be $55,000. But, their compensation plan might offer a commission of 10% on a quarterly revenue quota of $100,000 MRR. If the rep hits 100% of the quota 4 quarters in a row, they’ll bring home a year's commission of $40,000 (4x$10,000). Therefore, the total yearly earnings will be $95,000.
Now, before we see how much software sales reps earn when we tweak these different factors like location and job title, let’s look at the average base salaries. Keep in mind that these numbers don’t take into account commission, profit sharing, or bonuses. So the numbers are going to be lower than the real on-target earnings — the money a rep will earn if they hit 100% of quota.
How Much Do Software Sales Reps Make on Average?
The national average base salary of a software sales rep in the United States is $61,805/year, according to ZipRecruiter. But this number does not take into account commission, which could easily put your earnings into six figures.
There are also plenty of companies offering more than this, as shown below. Some almost double it.
Image via Glassdoor
How Much Software Sales Reps Earn by Location
Where you choose to work determines how much you’ll make as a software sales rep. According to ZipRecruiter’s data, software sales reps in San Mateo, CA earn the highest salaries at $77,433/year. Let’s look at how earnings vary across different tech hubs in the US.
How Much Software Sales Reps Earn by Job Title
There are four main job titles within the umbrella term of software sales rep: Business Development Representative, Inside Sales Rep, Account Executive, and Enterprise Account Executive. Let’s look at the average base salary for each of these different positions in the computer software industry based on salaries submitted to Glassdoor.
Feel free to play around with job salary data to filter for different combinations of years of experience, job title, location, and company size, as we’ve done below.
Image via Glassdoor
As you can see, Enterprise Account Executives in the software industry bring in a whopping average salary of $100,565 a year. And that’s without accounting for commission or profit-sharing. Their deals are also much larger than those of an Account Executive. So, their commission is usually higher as well.
For example, if you closed an account worth $120,000 in MRR, and your commission rate is 10%, you just racked in $12,000 from one close. Go buy your dad a boat.
Becoming a software sales rep is one of the quickest ways to start earning over $100,000 per year. Even if you have no sales experience, you can still reach these heights during your first year, as long as you work hard and go in with a hunger to learn something new every day. And, if you’re an experienced sales rep from a different industry looking for a change, the sky's the limit in SaaS sales.
To learn more about software sales and how much software sales reps earn check out the Sales Trax blog, which focuses on helping people find the right software sales job for their specific needs and career goals.