Commission Calculator
Calculate commission earnings from sales volume and commission rate.
Commission-based compensation — common in sales, real estate, and financial services — requires clear calculations to forecast earnings and verify payments. This calculator computes commissions from sales amounts at flat or tiered rates, showing the breakdown for each tier and the total earned.
How to Calculate Sales Commission
- Enter total sales revenue — the total value of sales the commission is based on.
- Choose flat or tiered — flat applies one rate to everything; tiered applies higher rates to sales above each threshold, with a full breakdown per tier.
- Add a base salary (optional) — to see total compensation and your effective earnings rate.
- Copy or share — copy the result, or copy a link that reopens the calculator with your exact numbers pre-filled.
Worked Examples
Flat commission
You sell $85,000 of product on a 10% flat rate:
$85,000 × 0.10 = $8,500 commission
Tiered commission
Your plan pays 8% on the first $50,000, 10% from $50,000–$100,000, and 12% above $100,000. You close $130,000 in sales:
| Tier | Sales in tier | Rate | Commission |
|---|---|---|---|
| $0 – $50,000 | $50,000 | 8% | $4,000 |
| $50,000 – $100,000 | $50,000 | 10% | $5,000 |
| $100,000+ | $30,000 | 12% | $3,600 |
| Total | $130,000 | 9.69% effective | $12,600 |
Note the common mistake: 12% does not apply to the whole $130,000 — only to the $30,000 above the top threshold. Applying the top rate to everything would overstate the commission by $3,000.
Base + commission (OTE)
A rep on a $40,000 base with 8% commission and a $500,000 annual quota has On-Target Earnings of:
$40,000 + ($500,000 × 0.08) = $80,000 OTE
Typical Commission Rates by Industry
Rates vary by company and region — these are widely used ranges to sanity-check an offer or a payout:
| Industry | Typical rate | Calculated on |
|---|---|---|
| Real estate | 2.5–3% per side | Sale price |
| SaaS / software sales | 8–15% | Contract value |
| Recruiting | 15–25% | Placement's first-year salary |
| Car sales | 20–25% | Dealer gross profit per vehicle |
| Insurance | 5–20% | First-year premium |
| Retail | 1–5% | Sales (often on top of hourly pay) |
| Affiliate marketing | 5–30% | Referred sale value |
| Financial advisory | 1–2% per year | Assets under management |
Common commission structures
- Flat rate — one percentage on all sales. Simple, predictable.
- Tiered / accelerators — rate steps up above thresholds to reward overperformance (use the tiered mode above).
- Draw against commission — a recoverable advance: you're paid a set amount monthly, which is deducted from commissions you later earn.
- Residual — ongoing commission on repeat/renewal business, common in insurance and subscriptions.
- Commission on gross profit — a percentage of margin rather than revenue, which discourages discounting.
Frequently Asked Questions
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