How to Write a Payment Structure Proposal

by Jonathan McLelland; Updated September 26, 2017
Payment structure proposals ensure payment methods are clearly outlined and understood.

A payment structure proposal is an official document outlining a potential method of paying or being paid. Payment structures may be utilized in the workforce as a method of paying employees or it may be utilized for collectors to help a debtor pay back owed monies. When outlining a payment structure proposal, you may follow several steps to ensure the proposal is fair and clearly outlined.

Compensation Payment Structure

Step 1

Outline the job description for the employee, which ensures readers understand what position the proposal is applicable to.

Step 2

Describe the overall payment structure. For example, will compensation be made weekly, bi-weekly, monthly or semi-annually and is the employee being paid on a salary, hourly or commission basis? Clearly outline potential pay dates along with the estimated compensation before taxes.

Step 3

Outline overtime qualifications and amounts. Once an employee works over 40 hours in a workweek, will he be compensated for his overtime or does his salary include any potential overtime?

Step 4

Include information regarding bonuses or commission. Will the employee be eligible for bonuses based on work performance or commission based on total sales? If so, clearly outline the method of calculating said bonuses or commission. For example,

“Employee is eligible for bi-annual bonuses based on performance. If the employee secures 12 new clients within this period a bonus of $1,200 will be included within his paycheck.”

“Employee is eligible for commission based on monthly sales. If his sales amounts exceed his monthly salary of $2,500 a 15% commission on all sales will be included within the following pay period.”

Step 5

Combine all this information into a single page document, and edit the document for clarity and structure. Make sure all pertinent information is included regarding salary dates, compensation type (salary, hourly, commission, etc.) and any opportunities for bonuses or additional commission. Sign and date the proposal.

Repayment Payment Structure

Step 1

Outline the total amount owed along with the reason for the debt. For example,

“John H. Smith owes Jane H. Smith $2,750.00 USD on a loan given to John H. Smith to help repay credit card debt.”

Step 2

Describe how the debtor will make payments and the amount of each payment. Will the payments be larger at first and then slowly become smaller as the debt is reduced or will payments be the same for each pay period. For example,

“John H. Smith agrees to pay $125.00 USD on the 15th of each month for the first six months. Upon the seventh month, payments are to be reduced to $100.00 USD made payable on the 15th of each month.”

“John H. Smith agrees to pay $125.00 USD on the 15th of each month for a period of 22 months.”

Step 3

Outline how the payments may be made and any restrictions for making payments. For example,

“Payments must be made in cash, money order or certified check. No payment may be made from a personal check.”

Step 4

Describe any disciplinary action to be made if a payment is missed or late. For example,

“Payments made before the 20th of each month are not subjected to late fees or penalties. Payments made after the 20th of each month are subjected to a $10.00 USD fee, which must be included within the following month’s payment.”

Tips

  • Make sure every detail of the payment process is covered within the proposal.

Warnings

  • Do not leave room for misinterpretation within the proposal. Clearly outline and describe payment methods and amounts.

About the Author

Jonathan McLelland has been a professional writer since 2005. He has worked as a story writer and editor for the international sitcom, “Completing Kaden,” as well as a proposal writer for various production companies. McLelland studied communication and theater at St. Louis Community College.

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