> ## Documentation Index
> Fetch the complete documentation index at: https://docs.tangoanalytics.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Percentage rent setup

> Configure the percentage rent structure including breakpoints and sales types.

Percentage rent is rent calculated as a percentage of a tenant's gross sales above a defined breakpoint. Set up the structure once, then generate calculations and payments each period.

## Natural breakpoint formula

A natural breakpoint is calculated as: **Base Rent ÷ Percentage Rate**

For example: "In addition to minimum rent, the tenant pays 5% of gross sales over the natural breakpoint."

<Steps>
  <Step title="Verify the recurring cost">
    In **Lease Details → Recurring Costs**, confirm that the base rent (or applicable fixed rent) record exists. If the percentage rent needs special allocation logic, also create a recurring cost with the **Percentage Rent** payment type.
  </Step>

  <Step title="Open Percentage Rent">
    Go to **Lease Financials → Percentage Rent** and click **New**.
  </Step>

  <Step title="Configure basic info">
    * **Breakpoint Type** — for example, Natural Breakpoint
    * **Calculation Method** — for example, Period-to-Date, No Annual True Up
    * **Report Format**, **First/Last Reporting Dates**, **Monthly Sales Report Due Day**
    * **Include in Breakpoint** — select the recurring cost used in the breakpoint calculation
    * **Start Month**, **Payment Frequency**, **Monthly Payment Due Day**
    * **Status** — Active
    * **Payment Type to Assign** — the payment type on generated percentage rent payments (for example, Percentage Rent)

    Click **Save**.
  </Step>

  <Step title="Add breakpoints">
    Click the **Breakpoints** tab, then **New**. Enter:

    * **Effective From / To** dates
    * **Percentage** — the rate applied to sales above the breakpoint
    * **Breakpoint Factor** — the percentage used to calculate the breakpoint amount

    Click **Save**.
  </Step>

  <Step title="Define sales types">
    Click **Exclusions/Offsets/Caps**, then **New**. At minimum, add:

    * **Sales Type** — Sales
    * **Subtype** — Gross Sales
    * **Sales Code** — for example, 50001
    * **Effective From / To** dates

    Add additional records for any exclusions or caps that apply to this lease. Click **Save**.
  </Step>
</Steps>

<Info>If a recurring cost does not appear in the **Include in Breakpoint** dropdown, return to Lease Details → Recurring Costs and confirm the cost record has been created.</Info>