Know what your sales are worth to you
Commission turns sales into pay, and the rules can get complicated: a base salary plus a percentage, a higher rate once you pass a target, or a flat fee for each referral. This commission calculator handles the common setups so you can check a payslip, compare job offers or set up a fair deal with a partner who sells for you.
It works for salespeople, agents, freelancers who pay or earn referral fees, and small businesses designing a commission plan.
How to use it
- Choose Flat rate, Two tiers or Find the rate.
- Enter the sales for the period.
- For a flat rate, enter the rate. For two tiers, enter where the first tier ends and the rate on each side of it.
- Add base pay if there is any, to see total pay as well as commission.
- To work backwards, choose Find the rate and enter what was paid.
Commission formulas
flat commission = sales × rate ÷ 100
two tiers = sales up to the limit × first rate + sales above the limit × second rate
rate = commission ÷ sales × 100
total pay = base pay + commissionIn a two-tier plan, the higher rate applies only to the sales above the limit, not to everything. That is how most tiered plans work, and it means crossing the threshold never makes your earlier sales worth less. If your plan pays the higher rate on all sales once you pass the target, use Flat rate with the higher rate instead.
Worked example: 48,000 of sales on two tiers
A salesperson earns 5% on the first $20,000 of sales each month and 8% on anything above, plus $2,500 base pay. This month they sold $48,000.
- First tier: 5% of $20,000 = $1,000
- Second tier: 8% of the $28,000 above $20,000 = $2,240
- Commission: $1,000 + $2,240 = $3,240.00
- Total pay: $2,500 + $3,240 = $5,740.00
The commission is $3,240.00, an effective rate of 6.75% across all sales. On a flat 5% the same month would have paid $2,400, so the second tier added $840.
Commission at a glance
| Sales | At 3% | At 5% | At 10% |
|---|---|---|---|
| 10,000 | 300 | 500 | 1,000 |
| 25,000 | 750 | 1,250 | 2,500 |
| 50,000 | 1,500 | 2,500 | 5,000 |
| 100,000 | 3,000 | 5,000 | 10,000 |
Questions to settle first
- Is it on sales or on profit? Commission on gross profit pays far less than the same rate on sales.
- When is it earned? Some plans pay when the order is placed, others only once the customer has paid.
- What happens with refunds? Many plans take back commission on returned or cancelled sales.
- Is it before tax? Commission is normally taxed as pay. For a whole pay period, the overtime calculator and hourly to salary calculator cover the other parts.
Frequently asked questions
How do I calculate commission?
Multiply the sales by the commission rate as a decimal. Sales of 48,000 at 5% earn 48,000 × 0.05 = 2,400. If there is base pay, add it for total pay. Choose Flat rate above, enter the sales and rate, and the calculator shows the commission, the total pay and the steps.
How does tiered commission work?
Different rates apply to different slices of sales. With 5% up to 20,000 and 8% above, sales of 48,000 earn 5% of 20,000 plus 8% of the remaining 28,000, which is 3,240. The higher rate rewards selling past the target without changing what the first slice earns.
How do I find my commission rate?
Divide the commission you were paid by the sales it was paid on, then multiply by 100. A payout of 1,350 on 27,000 of sales is a 5% rate. Choose Find the rate and enter both figures; it is a quick way to check a payslip against your agreement.
What is a typical commission rate?
It depends on the industry and on whether there is a base salary. Plans with a solid base often pay a few percent of sales, while commission-only roles and referral fees can pay much more. Compare total expected pay, base plus commission, rather than the rate alone.
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