Commission Calculator
Work out sales commission for a flat rate or a two-tier plan where a higher rate kicks in above a target. Add a base salary to see total pay, plus the effective commission rate on all your sales.
Calculate commission
Commission formulas
Flat rate
Commission = sales × rate ÷ 100Tiered (marginal)
Commission = min(sales, target) × rate₁ + max(0, sales − target) × rate₂Like income tax bands, the higher rate applies only to the sales above the target, not to all sales. Some plans pay the higher rate on everything once the target is hit; check your contract.
Total pay and effective rate
Total = base + commission · Effective rate = commission ÷ sales × 100Worked examples
- Commission = 25,000 × 0.05 = 1,250; total pay = 3,250
- 20,000 × 5% = 1,000; 5,000 × 8% = 400
- Commission = 1,400 (effective rate 5.6%)
Types of commission plan
| Plan | How it works |
|---|---|
| Straight commission | Pay is 100% commission, no base |
| Base plus commission | Fixed salary plus a percentage of sales |
| Tiered commission | Rate rises as sales pass targets |
| Gross margin commission | Percentage of profit rather than revenue; enter gross profit as the sales amount |
| Draw against commission | An advance that is repaid from future commission |
Frequently asked questions
How do I calculate commission?
Multiply the sale amount by the commission rate. 10% commission on a 3,500 sale is 350.
What is a typical sales commission rate?
It varies by industry: around 2–3% for property agents, 5–10% for many B2B and retail roles, and 20–30% or more for software and recruitment.
Is commission taxed?
Yes, commission is taxed as normal earnings. Employers may withhold tax at a different rate on lump-sum commission payments.
Related calculators
Results are estimates; your employment contract determines how commission is calculated and paid.
