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at-risk pay

At-Risk Pay

What is at-risk pay?

At-risk pay is another way of referring to performance-based compensation plans used to motivate employees. At-risk pay is a tactic used to incentivize performance, improve employee behavior, or keep team members engaged. Performance- based pay is most commonly split between base pay and commission pay- which together equals an employee’s total pay. However, when someone uses the term “at-risk pay” it’s typically just the commission or variable component of the salary that they’re referring to. At-risk pay can also refer to other types of incentive pay, such as bonuses, stock options, or spiffs.