Software Sales

Software Sales Salary: Everything Essential You Need to Know

For new and experienced salespeople, software sales is a profession rich in opportunity. The software industry is constantly growing; new startups are popping up left and right, and investors keep investing. These companies are in need of sales talent, and they’re willing to pay top dollar for it — not to mention perks like working remote.

Top-performing software salespeople can earn anywhere from $250,000/yr to over $1 million/yr. These are the top 10-20% of Account Executives, the ones who crush their quota quarter after quarter at powerful companies like IBM, Salesforce, and Oracle. But, even reps in the middle of the pack can earn six figures, as you’ll see in this article. 

In this guide, we’ll share just how much the software companies pay their salespeople on average, and we’ll break the average salary down by role and company type. First, let’s go over how software sales salary is calculated in software sales.

The Composition of Software Sales Earnings

It’s important to know that base salary, the number listed on most company review sites like Glassdoor, is only part of the picture when it comes to earnings in SaaS sales.

So, when we mention base salary averages, keep in mind that a lot of the reps are earning about double that or more since the quota-hitting commission is usually set equal to the base.

A software salesperson’s on-target earnings (OTE) is typically comprised of the following:

  • Base Salary: The annual salary a rep makes no matter their performance.
  • Commission: Cash compensation based on the percentage a rep achieves of their quota. 
  • Bonuses: Stock and cash bonuses for things like investments or high performance. 
  • Profit-Sharing: A share of the company’s quarterly or yearly profits — more common for Directors or VPs.

Before we show you the average salaries you can expect to earn in different roles as you move up the ladder and of different company types like fintech or medical tech, let’s take a look at the software sales average salary as a whole.

That said, still, feel free to scroll down to find your desired position or company type if you already have one in mind.

The Average Software Sales Salary

The average base salary for a software sales rep in the United States is currently $72,000/yr according to Zippia. Meanwhile, ZipRecruiter pegs it at $61,805/yr. So, let’s estimate it falling somewhere within that range.

Keep in mind that these figures exclude commissions, which in the software industry can easily match the base salary and bring it up to over $140,000 — if going by Zippia’s numbers.

Zippia also has the top 10% highest salaries at $116,000/yr, and those in the bottom 10% averaging $45,000/yr. Even the lowest base salaries in software sales are higher than those offered for many entry-level sales jobs.

Software Sales Salary by Different Roles 

The greatest determinant of how much you make as a software salesperson is your position. The higher up the hierarchy of positions, the more you’ll likely bring it. Indeed, once you get to Enterprise Account Executive or Director of Sales it's common to have a base salary of over $120,000/yr. Read on to see the progression of salaries through the ranks.

Sales Development Rep (Entry-Level) Salary

Entry-level software salespeople generally begin as sales development representatives in charge of booking qualified meetings for an Account Executive. SDRs in software sales earn an average of $49,942/yr base salary, according to Glassdoor. An SDR will also have a commission portion of their earnings.

The next step for an SDR is typically an Account Executive role, where they can make a lot more money because they’re actually closing sales deals and contributing revenue to the company.

Account Executive Salary

Account Executives in software sales demand an average base salary of $72,124/yr. Their on-quota commission usually equals 100% of their salary, meaning AEs can earn over $140,000/yr if they hit the company’s targets. AEs might start out selling to small and medium-sized businesses and then move up the ladder to sell to larger companies.

At Salesforce, the average Account Executive’s earnings look like this:

Mid-Market Account Executive Salary

The average base salary for a Mid-Market Account Executive is $75,891/yr. These AEs are selling to businesses with between 101-500 employees. The deals they manage are usually more complex and will require some higher-level sales skills than they do in the SMB AE position.

There also might be multiple decision-makers to sell. All this accounts for the increase in average base salary. Here are various companies that hire Mid-Market AEs and what they typically offer:

Enterprise Account Executive Salary

An Enterprise AE in the software industry takes home an average base salary of $110,740/yr — a big jump from their mid-market colleagues. They can demand this high salary because enterprise sales are notoriously difficult.

These AEs have to sell to large, established brands with rigid internal processes and other software tools that are already in place. Reps have to figure out how to make their software solution play nice with all these moving parts.

For reference, here’s an example of an Enterprise Account Executive’s earnings at Dell Technologies:

Sales Manager Salary

A sales manager in software sales can expect to earn a base salary of $103,345/yr. Sometimes they’ll receive a commission if their team hits quota or reaches certain goals. They might also have their own sales quota to hit if they’re part of a smaller company that needs all the firepower it can get.

Typically, sales management positions will be broken up into tiers based on whom you’re managing. For instance, there will be SDR managers and AE managers, the latter of which might also be split into Mid-Market and Enterprise AE managers. Usually, the managers in charge of the more experienced team will get a higher base salary.

Sales Engineer Salary

A Sales Engineer supports an AE in selling complex, scientific, or highly technical products. They answer product questions, diagnose prospect problems, and hold demos. They therefore must have the extensive product knowledge and can demand a high rate for that expertise. Sales Engineers in the software industry earn an average base salary of $111,504/yr.

While they don’t have a quota, they still might get extra money in the form of commission sharing and bonuses, as is the case in IBM’s Sales Engineer role shown below:

Director of Sales Salary

A Director of Sales in the software industry earns a base salary of $129,631/yr on average. They’ll likely earn extra earnings in the forms of commission or profit-sharing and cash and stock bonuses.

These leaders are usually in charge of multiple sales teams and managers. They might also oversee and run the entire sales department. Their role is strategic and analytical in nature, and they earn high rates for taking on the large responsibility for a company’s sales success.

Here’s an example of a Microsoft Director of Sales’ earnings:

Software Sales Salaries by Company Type

The salary you’ll earn as a software salesperson depends on the type of software you’re selling. So we’ve broken software sales down into company types, from cyber security software to ed-tech, and given you the corresponding average base salaries.

ZipRecruiter had data on the following software company type salaries:

  • Healthcare Software Sales: $81,986/yr average base salary.
  • ERP Software Sales: $98,161/yr average base salary.
  • Legal Software Sales: 86,038/yr average base salary.
  • Cyber Security Software Sales: $104,073/yr base salary.
  • Financial Software (Fin-Tech) Sales: $82,018/yr base salary.
  • Education Software (Ed-Tech) Sales: $66,901/yr base salary.
  • Human Resources Software Sales: $82,353/yr base salary.
  • Construction Software Sales: $75,812/yr base salary.

From our findings, cyber security software salespeople receive the highest base salary on average, at $104,073/yr, while education software salespeople earn the lowest at $66,901. However, these are averages. Keep in mind that a lot of your earnings will come down to how well you are able to sell your solution.

Software Sales Commission

Commission often makes up about half of a software salesperson’s earnings. Typically, for each deal closed, Account Executives make 8-12% commission on the total ARR closed. However, commission plans are usually slightly more nuanced than this.

Software Sales Quotas & Commission

Software sales quotas affect commission payouts and are usually represented by an ARR number for AEs (e.g. $500,000) and the number of meetings booked for SDRs. When we say commission on average makes up about half of a rep’s yearly earnings, that only holds true when the rep has hit quota.

Here’s an illustration. If a sales rep has a base salary of $60,000/yr, they’ll likely have a commission of $15,000 a quarter (60k/yr) if they hit their quota exactly.

If the rep only hits only a percentage of the quota, say 80% of it, the commission will usually be 80% of the on-target commission. Some companies might also have a percentage minimum a rep must hit to get any commission at all. A manager might create a commission plan in which reps who do not hit at least 60% of their quota receive no commission So, even if the salesperson hit 59% of the quota, they’d receive nothing but their salary and bonuses.

Accelerators in Software Sales Commission

Also, many companies will incentivize reps to surpass quota by adding accelerators, higher rates of commission that begin after a rep hits quota. Imagine a rep was earning 10% commission for all deals closed up to the quota. With accelerators, that number would start to go up after they passed the quota. In the 100% - 150% quota range they might earn 20% on all revenue closed. And from 150%-200% it might increase to 35%.

Living in this range, known as “in the kickers”, is a heck of a thrill ride. This is where your earnings as a software sales rep truly start to balloon-like crazy.

Bottom Line

Software sales reps who are just getting started in the field can expect to earn anywhere from $60,000 to $150,000 a year, depending on their skill level and company. Once you get a few years under your belt and move up to Mid-Market or Enterprise Account Executive, you have the opportunity to bring in 7 figures if you play your cards right and continue learning and performing. To find the right company for your needs and background, check out Sales Trax, the job board devoted to helping aspiring and experienced software salespeople land their next gig.