Bonus vs commission

The real difference is certainty

Commission is contractual arithmetic: sell this, receive that, with no discretion in between once the plan is set. Bonuses run on judgement: even "formula-driven" bonus schemes usually reserve discretion over the pool, the gateway conditions or the final award. That difference decides how people treat them: commission is planned around and relied on like salary, while bonuses are hoped for, which is exactly why commission drives day-to-day selling behaviour and bonuses reward broader outcomes.

When to use which

Commission fits roles where the individual visibly moves a measurable number: sales, recruitment placements, real estate. Bonuses fit everything else: team outcomes, company performance, project delivery, retention, and roles where measuring individual revenue would distort behaviour (support teams that suddenly "sell", engineers who ship fast and badly). Plenty of packages blend both, a commission plan for the core motion plus an annual bonus for the whole-of-company result.

The payroll consequences of the label

The distinction carries administrative weight: commissions form part of regular earnings for leave and (in Australia) superannuation purposes in most cases, while one-off bonuses have their own tax withholding treatment and their own rules about whether they count toward leave rates and severance calculations. Calling a payment the wrong thing in the contract creates reconciliation problems every payroll cycle after.