Example of Incentive Compensation Draw and Recovery

This scenario illustrates how you can pay flat amounts to participants for their draws and recover payments against all earnings.

Payment Plan Configuration

You have the Service Revenue plan component with Payment Plan Category set to Commission. The draw, or minimum amount, for the participant has these settings:

• 1,000 USD per period

• Stops at the end of the sixth period

Recovery is 100 percent of earnings above the minimum payment per period and starts at the fourth period. Because the draw is in effect through the sixth period, for the fourth, fifth, and sixth periods, payment processing ensures that the recovery amounts don't bring the minimum payment below 1,000 USD.

Earnings and Draw Adjustments

The table shows payment transaction earnings and the draw adjustments for six periods. The beginning draw balance for the first period is 0.00 USD.

The payment process does these actions:

• Sums draw adjustments across periods to determine the balance due from the participant at the end of each period

• Subtracts recovered amounts from the balance due

Period	Earnings	Draw Adjustment	Recovery Adjustment	Paid to Participant	Ending Balance Due from Participant	Balance Calculation
1	500	500	0	1,000	500	0 balance + 500 current draw
2	700	300	0	1000	800	500 balance + 300 current draw
3	400	600	0	1,000	1,400	800 balance + 600 current draw
4	2,000	0	1,000	1,000	400	1,400 balance - 1,000 current recovery
5	1,200	0	200	1,000	200	400 balance - 200 current recovery
6	750	250	0	1,000	450	200 balance + 250 current draw
7	2200	0	450 Waived	2200	0	450 balance waived