Commission

Commission Calculator

Enter your sales and commission plan. The commission calculator handles flat rates and tiered plans, applied by band or retroactively, adds base pay, and shows your effective commission rate and what each tier contributes.

Runs in your browserFree, no signupFormula shown below
Commission plan
Salary or draw for the same period.
How tiers apply
Tiers

Commission earned

$2,050.00

Effective rate 6.83% of sales. Total pay with base: $4,550.00.

Commission by tier
$0 to $10,000 at 5%$500.00
$10,000 to $25,000 at 7%$1,050.00
Over $25,000 at 10%$500.00
Commission$2,050.00
Base pay$2,500.00
Total pay$4,550.00
Sales and commission in each tier
Sales and commission in each tier
$0 to $10,000$500.00 on $10,000.00
$10,000 to $25,000$1,050.00 on $15,000.00
Over $25,000$500.00 on $5,000.00

How the commission calculator works

  • Flat rate: one percentage on all sales. Add a target to see the sales you need.
  • Tiered rates: set the sales level where each tier starts and its rate. Choose whether each rate applies only to its own band or whether the top tier reached applies to all sales.
  • Base pay: add salary or draw for the same period to see total pay.

Commission formula

Flat: commission = sales × rate
Marginal tiers: commission = Σ (sales inside each band × that band's rate)
Retroactive tiers: commission = all sales × rate of the highest tier reached
Effective rate = commission ÷ sales

Worked examples

Flat: $40,000 in sales at 6% with $2,500 base pay

  1. Commission: $2,400.00. Total pay: $4,900.00.

Tiered: $30,000 in sales, 5% to $10,000, 7% to $25,000, 10% above, $2,500 base pay

  1. $10,000.00 at 5% = $500.00
  2. $15,000.00 at 7% = $1,050.00
  3. $5,000.00 at 10% = $500.00
  4. Marginal commission: $2,050.00 (effective 6.83%), total pay $4,550.00.
  5. Retroactive, all $30,000 at 10%: $3,000.00, total pay $5,500.00.

Commission table

Sales2%5%8%10%15%
$10,000$200$500$800$1,000$1,500
$25,000$500$1,250$2,000$2,500$3,750
$50,000$1,000$2,500$4,000$5,000$7,500
$100,000$2,000$5,000$8,000$10,000$15,000
$250,000$5,000$12,500$20,000$25,000$37,500

Commission plans can include caps, clawbacks for returns, and draws. Read how sales commission is calculated and check your written plan.

Frequently asked questions

How do I calculate commission?

Multiply the sales amount by the commission rate as a decimal. For example, $40,000 × 6% = $40,000 × 0.06 = $2,400. Add any base pay for the period to get total pay.

What is a tiered commission?

A plan where the rate rises as sales pass set thresholds. In a marginal plan each rate applies only to sales inside its band. In a retroactive plan, reaching a tier applies its rate to all sales.

Is commission taxed?

Commission is wages, so it is subject to payroll taxes and income tax withholding like other pay. The results here are gross amounts before any deductions.

Does commission affect overtime?

For nonexempt employees, commissions generally count toward the regular rate used for overtime under the FLSA. See the Department of Labor regular-rate fact sheet in the sources.

How much do I need to sell to earn a target?

Divide the target commission by the rate. To earn $3,000 at 6%, you need $3,000 ÷ 0.06 = $50,000 in sales. Use the target field in flat-rate mode.

Related guides

How this calculator was built. The formula, defaults, and edge cases are documented in a research record and covered by automated tests. It estimates gross amounts from your inputs; it does not determine legal entitlements, taxes, or take-home pay. Read our methodology and disclaimer.

Last updated:

Sources