SDR Employment Agreement: Quota Expectations and Commission Structure (What to Watch For)

If you’re stepping into (or leveling up within) an SDR role, your compensation and performance expectations often live or die by what’s written in your SDR employment contract. Yet many sales development reps sign a sales development rep agreement quickly—especially when the offer looks attractive—without pressure-testing quota definitions, commission triggers, clawbacks, or the fine print that decides whether your pipeline work actually turns into pay.

This guide breaks down how quota expectations and commission structure typically work in a sales development representative contract, what clauses to look for (and negotiate), and how to protect yourself from ambiguous language that can reduce earnings or make quotas effectively unattainable.

Perspective note: This article is written for the service provider—the SDR—reviewing an SDR job contract (whether employee or independent contractor).

---

Why quota and commission terms matter more for SDRs than most roles

Unlike many positions where output is measured by hours or projects shipped, SDR performance is often measured by attribution: who sourced the meeting, whether the meeting was “accepted,” whether it converted, and whether it met ICP criteria. That attribution can be subjective—unless the contract makes it objective.

A strong sdr employment contract should answer these questions clearly:

• What exactly is my quota?
• When is a meeting “qualified” and “accepted”?
• When and how do I earn commission?
• What events reduce or reverse commission (clawbacks, no-shows, disqualification, reassignment)?
• Who decides disputes, and what evidence counts (CRM entries, call recordings, email threads)?

If those points aren’t clear, you can hit the activity targets and still miss commission.

---

Employee vs independent contractor SDR: your contract may look similar, but risk is different

Many SDRs work as employees, but a growing portion work as independent contractors or through agencies. Your sales development rep agreement might look similar either way—quota, commission, confidentiality, tools—but the legal and financial implications differ.

Key differences that affect quotas and commission

• Control and scheduling: Contractors typically retain control over how work is done; employee agreements may impose stricter policies and performance management.
• Expense reimbursement: Employees may get reimbursements or stipends; contractors often bake expenses into their rate.
• Termination and notice: Contractors may have shorter termination clauses and fewer protections.
• Commission protections: Some jurisdictions treat employee earned commissions as wages with stronger protections; contractors may rely more heavily on contract language.

Regardless of classification, the quota and commission provisions should be written to eliminate ambiguity and reduce discretionary “gotchas.”

---

Quota expectations: what should be defined in an SDR employment agreement?

Quota isn’t just “10 meetings per month.” In a well-written sales development representative contract, quota expectations usually break into measurable components.

1) The quota metric: what counts?

Common quota measures include:

• Qualified meetings set (meetings booked on AE calendars)
• Qualified meetings held (meeting occurred)
• Sales Accepted Leads (SALs) (AE approves)
• Sales Qualified Leads (SQLs) (meets criteria and is accepted into pipeline)
• Opportunities created (opportunity record created in CRM)
• Pipeline sourced (dollar amount attributed to SDR)
• Revenue influenced (downstream closed-won attribution)

What to look for: Your sdr job contract should specify the controlling metric and a written definition for it. “Qualified meeting” must be defined in contract or an attached policy incorporated by reference (and that policy must be accessible and version-controlled).

2) ICP qualification criteria: define it or you’re exposed

Quota disputes often come down to whether the prospect was “in ICP.” Your SDR employment contract should clarify:

• Company size range, industry, geography
• Required titles/seniority
• Required tech stack or triggers
• Disqualifiers (students, consultants, competitors)
• Whether exceptions count (and who approves)

Negotiation tip: Push for objective ICP criteria and a process for pre-approval of edge cases. If the company can change ICP mid-quarter without adjusting quota, you carry the risk.

3) Activity expectations vs performance expectations

Some agreements include both:

• Activity KPIs (calls/day, emails/day, sequences launched)
• Outcome KPIs (meetings held, SQLs)

Activity requirements can be reasonable—but be cautious if the company can terminate for “failure to meet activity metrics” even when you’re hitting outcomes (or vice versa).

Best practice: Your sales development rep agreement should distinguish between guidelines and conditions of continued engagement, and include a reasonable ramp period.

4) Ramp period: don’t accept full quota on day one

A fair agreement includes a ramp, such as:

• Month 1: 25–50% quota
• Month 2: 50–75% quota
• Month 3: 100% quota

Also consider ramping commission accelerators or guaranteeing a minimum draw (more on this below).

5) Territory, account lists, and lead source allocation

Quota is only meaningful relative to:

• Territory assignment (geo/vertical)
• Account list quality and size
• Inbound vs outbound mix
• Round-robin fairness
• How often territories can be changed

Watch for: clauses allowing the company to “revise territories and quotas at any time in its sole discretion.” Some discretion is normal, but you can negotiate guardrails such as advance notice, pro-rated quotas, or written justification.

6) Tools and data access: can you do the job?

If you’re expected to deliver meetings, your contract should clarify access to:

• CRM (Salesforce/HubSpot)
• Sequencing tools (Outreach/Salesloft)
• Data providers (ZoomInfo/Apollo)
• Dialer and call recording
• Email domains and warm-up support

If tools are not provided (common for contractors), the agreement should clarify what you’re expected to supply and whether costs are reimbursable.

---

Commission structure: common models and what your contract must specify

Commission language in a sales development representative contract should define trigger, amount, timing, and reversals. Here are the most common SDR commission models.

Model A: Pay per qualified meeting (set or held)

• Pros: Simple, predictable
• Cons: Can be subjective if “qualified” is vague

Contract must define:

• What counts as a meeting (calendar event? video link? attendee requirements?)
• Set vs held (and who controls the “held” designation)
• No-show rules and reschedule windows
• Minimum duration (e.g., 15/30 minutes)
• Required attendees (e.g., decision-maker present)

Model B: Pay per SQL/SAL accepted

• Pros: Aligns with sales acceptance; can reduce low-quality meetings
• Cons: Risky if AEs reject for subjective reasons

Contract must define:

• Acceptance criteria
• Time window for AE review (e.g., 5 business days)
• What happens if AE fails to review
• Escalation path for disputes

Model C: Pay per opportunity created (or pipeline sourced)

• Pros: Strong alignment to revenue
• Cons: Long feedback loops; attribution disputes

Contract must define:

• When the opportunity is considered “created”
• Minimum opportunity amount (if any)
• Attribution rules (first touch vs last touch vs shared credit)
• CRM documentation requirements

Model D: Percentage of revenue on closed-won deals sourced

• Pros: Highest upside
• Cons: Long sales cycles; you may leave before closing; clawbacks

Contract must define:

• Sourcing rules
• Vesting/eligibility if you leave before close
• Payment timing after customer payment
• Refund/chargeback clawbacks

---

Commission mechanics: clauses SDRs should read carefully

1) Commission trigger events (the “earned” moment)

Your sdr employment contract should clearly state when commission is earned versus merely calculated. Common triggers include:

• Meeting held and marked “qualified” in CRM
• SQL accepted in CRM
• Opportunity created with SDR as source
• Closed-won and invoice paid

Why it matters: If commission is only earned after “payment received,” you’re financing the company’s cash flow—and you may lose commission if the client churns quickly.

2) Payment timing and payroll schedule

Look for:

• Monthly vs bi-weekly commission payouts
• Payment lag (e.g., paid in the following month after validation)
• Whether commissions are paid on the next regular payroll or separately

Clarity wins: “Commissions paid within X days after month-end, subject to validation.”

3) Validation and dispute resolution process

Some agreements let the company unilaterally determine qualification. That’s common—but you can negotiate structure:

• Clear validation steps (CRM fields, meeting notes, call recording link)
• Time limits for review
• Written reasons for rejection
• Escalation path (Sales Ops, RevOps, SDR manager)

4) Draws, guarantees, and recoverable draws

If you’re joining a new team or product, you might see a draw:

• Non-recoverable draw: a guaranteed minimum (safer)
• Recoverable draw: an advance against future commissions (riskier)

If it’s recoverable, ensure the contract states:

• How it’s recouped
• Whether recoupment continues after termination
• Whether it can create a negative balance you must repay

5) Accelerators and decelerators

Accelerators can materially change earnings:

• 1.0x up to 100% quota
• 1.25x after 100%
• 1.5x after 125%

Make sure your sales development rep agreement defines:

• Whether accelerators apply monthly or quarterly
• Whether performance is measured on set/held/accepted basis
• Whether accelerators apply retroactively (common) or only above threshold

6) Clawbacks, refunds, and disqualifications

Clawbacks are one of the biggest “silent” risks. Watch for:

• Clawback if the meeting is later deemed unqualified
• Clawback if opportunity is closed-lost
• Clawback if customer churns within X days
• Clawback if prospect was already in pipeline (“existing opportunity” rules)

Negotiate limits: time window (e.g., 30–60 days), objective conditions, and a cap on clawback amounts per period.

7) Post-termination commission rights

This is critical if your comp is tied to pipeline or revenue.

Your sdr job contract should clarify:

• Are commissions owed for meetings/SQLs generated before termination but validated after?
• Are you paid on opportunities you sourced that close after you leave?
• What if the company terminates you “for cause”—does that wipe commissions?

Practical protection: “Commissions earned prior to termination remain payable according to the normal schedule.”

---

Quota changes mid-period: the clause that can erase your earnings

Many contracts allow quota adjustments. The question is how and when they can change.

Red flags in an SDR employment contract:

• “Company may change quota at any time for any reason.”
• “Commission plan may be modified or canceled at the company’s discretion.”
• “No commission is earned until paid.”

What’s more reasonable:

• Quota changes apply prospectively (next month/quarter)
• Written notice (e.g., 14–30 days)
• Pro-rated quota if territory changes mid-month
• Protection for work-in-progress (meetings booked before changes)

---

Data integrity: if it isn’t in the CRM, it didn’t happen

SDR commission disputes often come down to CRM hygiene. A well-drafted sales development representative contract will specify:

• Required CRM fields (source, campaign, SDR name)
• Required notes (pain, use case, next steps)
• Timestamp rules (must log within X hours)
• What happens when systems are down
• Whether screenshots or email evidence can substitute

If you’re a contractor using your own tools, ensure the agreement clarifies how you’ll share evidence and how qualification will be confirmed.

---

Non-compete, non-solicit, and confidentiality: don’t let commission distract you from restraints

Even though quotas and commission are your immediate focus, your sales development rep agreement may also include:

• Confidentiality & IP assignment (standard)
• Non-solicitation (clients and employees)
• Non-compete (varies widely; enforceability depends on jurisdiction)
• Invention assignment (especially if you build sequences, scripts, or playbooks)

Make sure restrictions are:

• Narrow in time and scope
• Tied to legitimate business interests
• Not so broad that they block future SDR roles

---

A practical “SDR contract checklist” for quota and commission

Before you sign an sdr employment contract, verify the agreement answers these clearly:

1. Quota metric: meetings set/held, SQLs, opportunities, pipeline, revenue?
2. Qualification criteria: ICP definitions, disqualifiers, required attendees, minimum duration.
3. Attribution rules: how credit is assigned; shared credit rules.
4. Validation timeline: who approves and by when.
5. Commission trigger: when it’s earned.
6. Payment schedule: when you get paid and what documents are required.
7. Clawbacks: conditions, time limits, caps.
8. Ramp: reduced quotas for initial months.
9. Quota/territory changes: notice, pro-rating, prospective changes only.
10. Post-termination pay: commissions earned but unpaid; pipeline that closes later.

If any of the above is missing or vague, treat it as a negotiation point—not an afterthought.

---

Example clause concepts (plain English) you can ask to add or clarify

You don’t necessarily need to draft legal language yourself, but you can request concepts like:

• “A meeting is qualified if it meets the written ICP criteria and includes a prospect with [title level] who attends for at least [X] minutes.”
• “AE acceptance/rejection must occur within [5] business days; otherwise it is deemed accepted.”
• “Quota changes require [14] days’ notice and apply only to future periods.”
• “Commissions earned before termination are payable on the regular schedule.”
• “Clawbacks limited to [30/60] days and apply only if the meeting was materially misrepresented.”

These are the kinds of guardrails that turn a vague sales development representative contract into a workable, fair performance document.

---

Final thoughts: treat your commission plan like product specs—get it in writing

As an SDR, your value is measurable—but only if the measurement system is defined clearly and administered consistently. A solid sdr job contract doesn’t just protect the company; it protects you from shifting goalposts, subjective qualification standards, and commission reversals that you couldn’t reasonably anticipate.

If you want a faster way to generate and review SDR-friendly terms—especially around quotas, acceptance criteria, clawbacks, and post-termination commissions—use an AI-powered contract generator like Contractable to create a tailored SDR employment agreement template and iterate it with your specific role details: https://www.contractable.ai

---

Other questions SDRs ask (to keep learning)

• What’s the difference between paying commission on meetings set vs meetings held?
• How can I negotiate SDR quota during a territory change or ICP shift?
• Are SDR commissions considered wages, and does that change legal protections?
• What’s a recoverable draw, and when is it a bad idea?
• How should a sales development rep agreement handle shared credit with another SDR or marketing?
• What commission terms matter most if the sales cycle is 6–12 months?
• What are reasonable clawback windows for SDR meeting-based commissions?
• How do I document qualification in the CRM to prevent commission disputes?
• What’s the best way to structure accelerators for SDRs (monthly vs quarterly)?
• If I’m an independent contractor SDR, what extra terms should I include (expenses, tools, termination, invoicing)?