Gain share summary
Seahawk Sprinklers
Fire sprinkler contractor
Example data. Seahawk Sprinklers is a made-up fire sprinkler contractor, not a real client.
Threshold
$4,700,000
Overhead plus the cushion. This is a dollar bar, not a goal to beat last year.
Gain
$300,000
Gross profit minus the threshold.
Company share
$150,000
The gain minus the team pool.
Team pool
$150,000
The team share of the gain. The payroll cap is off.
Bonus of eligible pay
14.1%
Team pool divided by eligible payroll. This is the result for this scenario, not a promised rate.
Split
Company 50% / Team 50%
Payroll cap is off.
The numbers behind the bar
- Revenue
- $12,000,000
- Gross profit
- $5,000,000
- Operating expenses
- $3,900,000
- Cushion
- $800,000
- Eligible payroll
- $1,063,000
- Eligible headcount
- 11
Payout schedule
Each period pays its cumulative share of the year-to-date team pool, minus what was already paid. The payout is never negative.
| Period | Payout date | Gross profit | Year-to-date gain | Cumulative share | Paid this period |
|---|---|---|---|---|---|
| Q1The cumulative share of the year-to-date team pool. Nothing has been paid yet. | Mar 31, 2026 | $1,450,000 | $275,000 | 10% | $13,750 |
| Q2Year-to-date gross profit is on or under the bar, so this period pays nothing. | Jun 30, 2026 | $900,000 | $0 | 30% | $0 |
| Q3The cumulative share of the year-to-date team pool, minus what was already paid. | Sep 30, 2026 | $1,400,000 | $225,000 | 60% | $53,750 |
| Q4The cumulative share of the year-to-date team pool, minus what was already paid. | Dec 31, 2026 | $1,250,000 | $300,000 | 100% | $82,500 |
Three years
| Down | Flat | Good | |
|---|---|---|---|
| Gross profit | $4,000,000 | $5,000,000 | $5,800,000 |
| Gain | $0 | $300,000 | $1,100,000 |
| Company share | $0 | $150,000 | $550,000 |
| Team pool | $0 | $150,000 | $550,000 |
The down year finishes under the bar, so the company pays nothing extra on that result.
Each person
| Person | Group | Base pay | Payout | Of their pay |
|---|---|---|---|---|
| Elena VasquezGeneral manager | Senior leadership | $165,000 | $23,384 | 14.2% |
| Marcus HaleOperations manager | Senior leadership | $140,000 | $19,841 | 14.2% |
| Priya ShahController | Senior leadership | $130,000 | $18,424 | 14.2% |
| Owen BriggsOwner | Owner | $180,000 | $0 | 0.0% |
| Dana OkonkwoProject manager | Staff | $96,000 | $13,605 | 14.2% |
| Luis RomeroProject manager | Staff | $92,000 | $13,038 | 14.2% |
| Hannah ChoEstimator | Staff | $88,000 | $12,472 | 14.2% |
| Andre WilliamsForeman | Staff | $84,000 | $11,905 | 14.2% |
| Sofia AlvarezForeman | Staff | $80,000 | $11,338 | 14.2% |
| Ben CarterFitter | Staff | $72,000 | $10,204 | 14.2% |
| Riley NguyenFitter | Staff | $68,000 | $9,637 | 14.2% |
| Taylor BrooksApprentice | Staff | $48,000 | $6,152 | 12.8% |
| Sam PatelWarehouse coordinator | Staff | $32,000 | $0 | 0.0% |
| Casey MorganOffice administrator | Staff | $52,000 | $0 | 0.0% |
How gain share works
The company sets a dollar bar for the year. That bar is overhead plus a cushion, so the business is funded before anyone shares a bonus.
Gross profit above the bar is the gain. Gross profit on or below the bar means the gain is zero.
The gain is split between the company and the team. A 50/50 split shares it evenly. A 75/25 split keeps 75 percent in the company and pays 25 percent to the team.
The team pool can also be capped as a percent of eligible payroll, so a very strong year does not produce an outsized bonus.
What each person receives depends on the distribution rule: a percent of base pay, an equal share, hours worked, or tenure. Senior leadership can be included, included at a lighter weight, or left out. Owners are left out unless you turn them on.
Payouts are held back early in the year. Each period pays the cumulative share earned so far, minus what was already paid. The amount never goes backwards. A weak period pays nothing, and a later period can catch up.
The bonus as a percent of pay is the team pool divided by eligible payroll. It moves with the year. It is the result of this scenario, not a rate the company promises ahead of time.
Talk it through with Norsten
Bring your own numbers to a working session and decide whether a gain share fits the business.
Talk it through with NorstenDrivers on the plan, field utilization 74% against a target of 80%, and days sales outstanding 58 days against a target of 45 days, are context only. They do not change these figures.