Roofing sales commission: how to pay roofing sales reps without losing margin
The 4 common roofing sales commission plans (percent of contract, percent of gross profit, 10/50/50 and tiers) with math examples, pay timing and legal basics.
Contractor shaking hands with a project manager on a job site. Illustrative photo: Ron T / Unsplash
A roofing sales commission plan works when the rep earns more only when the company makes more. That usually means paying on gross profit (or a revenue percentage with a price floor), paying on collected money, and writing every rule down before the first job is signed.
This guide is for owners of roofing companies doing $1M+ a year who are hiring or re-pricing sales reps. It covers the common plans, the math, pay timing and the legal basics. It is not legal or tax advice.
The 4 common roofing commission plans
These are the plans most roofing companies use. The dollar figures are simple math examples, not industry averages.
| Plan | How it works | Example on a $20,000 job with $12,000 in costs | Best for |
|---|---|---|---|
| Percent of contract or collected | Rep earns a flat rate of the job total | 10% = $2,000 | New reps, simple pay |
| Percent of gross profit | Rep earns a share of what’s left after materials and labor | 25% of $8,000 = $2,000 | Protecting margin |
| 10/50/50 split | Company takes 10% for overhead, subtracts job costs, splits the rest 50/50 with the rep | ($20,000 − $2,000 − $12,000) ÷ 2 = $3,000 | Experienced reps who price well |
| Tiered | Rate goes up as margin or monthly volume goes up | 20% of GP under 35% margin, 25% at 35% to 45%, 30% above | Rewarding top reps |
The 10/50/50 and tiered structures are described in detail by ContractorsCloud and by Hook Agency. In the Hook Agency piece, roofing consultant Adam Bensman describes revenue plans from 7% (rep handles less of the process) up to 12% (rep handles the whole job), and says a rep on 10/50/50 averages 10% to 20% of the total job.
Revenue vs gross profit: the real tradeoff
A revenue plan pays the same rate whether the rep sold at full price or gave away $3,000 to close. That is the main reason owners move to gross profit:
| Same $20,000 job, rep discounts $2,000 | Pay at 10% of revenue | Pay at 25% of gross profit |
|---|---|---|
| Full price ($20,000, $8,000 GP) | $2,000 | $2,000 |
| Discounted ($18,000, $6,000 GP) | $1,800 | $1,500 |
| Company keeps on the discounted job (GP minus commission) | $4,200 | $4,500 |
On the profit plan, the discount costs the rep more, so the rep defends your price. The catch: reps need to trust your job cost numbers. Share the costing sheet for every job, or the plan will feel like a black box.
Who paid for the lead changes the rate
A rep who knocks doors after a storm and a rep who walks into an appointment your company paid for are not doing the same work. Many owners set two rates:
- Company-generated: leads or booked appointments from your marketing. Lower rate, because the company carried the cost of getting the homeowner to the table.
- Self-generated: referrals, canvassing and jobs the rep found alone. Higher rate.
Write down what counts as each one. “The lead came in through our phone, form or appointment calendar” is a rule nobody can argue with.
Before you set the company-lead rate, add up what each sit-down really costs you in marketing. Commission plus marketing per signed roof has to leave you a healthy margin. Our 3x rule calculator shows the most you can spend to win one roof.
When to pay commission
| Timing | Pros | Cons |
|---|---|---|
| All at signing | Reps love it | You pay on jobs that cancel or never collect |
| Split: part at install, rest at paid in full | Balanced, common in roofing | Needs clear tracking |
| All after final payment | Safest for cash flow | Long wait; good reps may leave |
| Draw against commission | Steady income for new reps | Must be reconciled; write down what happens if the rep leaves owing a balance |
Whatever you choose, cover these in writing:
- What the commission is based on (contract, collected or gross profit) and how job costs are calculated.
- When it is paid and what triggers each payment.
- What happens with cancellations, chargebacks, change orders and supplements.
- Company-generated vs self-generated rates.
- What happens to open jobs when a rep leaves.
Legal basics owners ask about
- Commission only for outside reps. Under the federal Fair Labor Standards Act, outside sales employees are exempt from minimum wage and overtime when their primary duty is making sales and they are customarily and regularly away from the employer’s place of business, including selling at the customer’s home. The salary requirements don’t apply to this exemption. Selling mainly by phone or internet doesn’t count. Source: U.S. Department of Labor Fact Sheet #17F.
- Employee or 1099. It is not your choice of label. The IRS looks at behavioral control, financial control and the relationship of the parties. If you set the rep’s schedule, scripts and pricing, they may be an employee. Source: IRS, Independent contractor or employee.
- Written plans. Some states require it. In California, Labor Code section 2751 says commission contracts must be in writing, explain how commissions are computed and paid, and the employer must give a signed copy and get a signed receipt. Even where it isn’t required, a written plan prevents most fights.
Check your state’s rules with an employment attorney before you roll out a plan.
How to know if your plan is working
Track these for each rep every month:
- Close rate on company-generated sit-downs (signed roofs ÷ sit-downs).
- Average gross margin on signed jobs, not just average ticket.
- Commission as a share of revenue across all jobs.
- Cancellation rate after signing.
If close rate is fine but margin keeps dropping, your plan rewards discounting. If margin is fine but reps don’t stay, check pay timing before you raise the rate. And if reps are idle, the problem is not the commission plan, it is the number of homeowners sitting down. Our roofing sales process and show rate guide cover the steps before the close.
Keep your reps in front of homeowners
The best commission plan fails when reps run out of appointments. Booked Contractor books roof estimate appointments for US roofing companies doing $1M+ a year. We run Meta ads on your own ad account, call every lead in under a minute, qualify the homeowner (owns the home, real roofing project) and book the estimate on your calendar. You pay a flat fee only when the homeowner sits down with your team, and we work with one roofing company per city. See how it works for roofing companies and pricing.
Related: Roofing sales process · Roof financing for roofing companies · 3x rule for roofing marketing budget
Frequently asked questions
What is a normal commission for a roofing sales rep?
There is no official national figure for roofing reps. The plans most roofing companies use are a flat percentage of the contract or collected amount, a percentage of gross profit, the 10/50/50 split and tiered plans. In a Hook Agency article on roofing compensation, roofing consultant Adam Bensman describes 7% to 12% of the total collected, and says a rep on a 10/50/50 plan averages 10% to 20% of the total job. Your right number depends on your margins and who pays for the leads.
Is it better to pay roofing reps on revenue or on gross profit?
Paying on gross profit protects your margin, because the rep earns more only when the job is priced well. Paying on revenue is simpler to explain and calculate, but a rep can win jobs by discounting and still get paid the same rate. Many owners start with revenue for new reps and move experienced reps to a gross profit plan.
When should a roofing company pay commission?
Most companies pay part at signing or install and the rest when the job is paid in full, or all of it after final payment. Paying only on collected money protects you from cancellations and unpaid jobs. Whatever you choose, write it down, including what happens with chargebacks and jobs that cancel.
Can a roofing sales rep be paid commission only?
Often yes for reps who sell at the homeowner's house. Under the federal Fair Labor Standards Act, outside sales employees whose main job is making sales away from the employer's place of business are exempt from minimum wage and overtime, and the salary rules don't apply to them. Inside reps who sell by phone are different, and state laws can add rules, so check with an employment attorney.
Should reps earn less on company leads than on self-generated leads?
Many owners pay a lower rate on leads or appointments the company paid for, and a higher rate on jobs the rep found alone, because the company carried the marketing cost. If you do this, define both in writing so there is no argument about where a lead came from.
David Sierra is the founder of Booked Contractor. In 10+ years of digital marketing and lead generation he has worked with 300+ clients, generated thousands of qualified sales calls and invested more than US$30M in ads.