Skip to content
ENExplore Calculators

Incentive Payout Calculator

Work out incentive payout instantly with clear inputs, formula shown and shareable results.

About Incentive Payout Calculator

Incentive curves have three inflection points: a threshold below which nothing pays, target where 100% pays, and a cap. Between threshold and target the payout ramps from 50% to 100%; above target an accelerator of around 2% per point of over-achievement applies until the cap.

Formulas

Below target

Factor = 0.5 + (Achievement - Threshold) / (100 - Threshold) x 0.5

Above target

Factor = 1 + (Achievement - 100) x 2%

Payout

Payout = Target incentive x Factor, capped

Worked example

With the default values below, Incentive Payout Calculator returns Incentive payout of $372,000.00. Change any input above and every figure here is recalculated in your browser.

Inputs used

Target incentive amount
300,000
Target achievement
112
Threshold below which nothing pays
80
Cap on payout as % of target
200

Results

Incentive payout
$372,000.00
Payout as % of target
124.00%
Above-target element
$72,000.00
Threshold status
Above threshold — payout earned

Step by step

  1. 1Values used
  2. 2Below target
  3. 3Above target
  4. 4Payout
  5. 5Incentive payout= 372,000.00
  6. 6Payout as % of target= 124.00
  7. 7Above-target element= 72,000.00
  8. 8Threshold status= Above threshold — payout earned

Assumptions and limits

  • The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
  • In particular, this calculator does not take inflation, tax, fees or charges or compounding frequency into account.
  • Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

Why have a threshold at all?

To avoid paying incentive for performance that does not cover the cost of the plan. Thresholds are typically set at 80-90% of target.

Why cap the upside?

To protect against windfalls from a one-off deal or a mis-set target. Caps of 150-200% of target are standard.

Related Calculators

Incentive Payout Calculator – Calculate Incentive payout