Commission Calculator
Work out commission the way your plan actually pays: a flat rate on revenue, a rate on gross profit, only on sales above a quota, or with tiered brackets. Add a base salary for total pay, see how the sale price splits between earner and payer, or reverse solve to find the rate from a known payout.
Formula
Worked example
A 5% commission on $50,000 of revenue: 50,000 × 0.05 = $2,500. On a margin plan with $30,000 COGS, the base is $20,000 profit, so 5% pays $1,000. Above a $20,000 quota, only $30,000 counts, paying $1,500.
How sales commission is calculated
A straight commission is the sale amount multiplied by the commission rate expressed as a decimal. A 5% rate means you keep 5 cents of every dollar sold, so $50,000 in sales pays 50,000 × 0.05 = $2,500. Convert any percentage rate to a decimal by dividing by 100 before multiplying. The commission base, the figure the rate is applied to, is not always full revenue: switch the mode to pay on gross profit, only on sales above a quota, or across tiered brackets so the math matches your actual plan.
Revenue, margin, quota and tiered plans
On a revenue plan the rate hits the whole sale. On a margin plan it hits gross profit (sale amount minus cost of goods sold), which protects the company on discounted deals and ties your pay to profitability. A quota plan pays only on the amount above a threshold, so the first slice of sales earns nothing. Tiered plans raise the rate as you cross each bracket, so your blended effective rate sits below the top tier you reached. This calculator reports the effective rate on revenue for every mode so different structures are directly comparable.
Base salary, total pay and who pays
Many sales roles combine a fixed base salary with commission so income is steadier between deals. Total pay for the period is simply the base plus the commission earned, and the donut and commission-share figure show how much of your pay is guaranteed versus performance-based. Commission can also be paid by either side of a deal: when the seller pays, it is deducted from the sale so the calculator shows the net the seller keeps; when the buyer pays, it is added on top so the calculator shows the full price the buyer hands over. All figures are gross amounts before taxes and deductions.
Reverse solving and plan caveats
Use the reverse mode to recover the effective rate from a known payout: divide the commission received by the sale amount and multiply by 100. It is a quick way to audit a paycheck or compare offers stated in dollars rather than percentages. Real plans add wrinkles this calculator keeps deliberately simple. Accelerators reward exceeding quota with a higher rate, caps limit total payout, and a draw is an advance against future commission that gets recovered from later earnings. For those, calculate each piece separately and combine the results.
Commission earned by rate (per $10,000 in base)
| Commission rate | Commission on $10,000 |
|---|---|
| 1% | $100 |
| 2.5% | $250 |
| 5% | $500 |
| 10% | $1,000 |
| 15% | $1,500 |
| 20% | $2,000 |
Commission on $10,000 of the commission base at common rates. Scale up proportionally for larger amounts.
Frequently asked questions
How do I calculate a 5% commission?
Multiply the commission base by 0.05 (5 ÷ 100). On $50,000 of sales that is 50,000 × 0.05 = $2,500. For any rate, divide the percentage by 100 to get the decimal, then multiply by the base the rate applies to.
What is the difference between a revenue and a margin commission?
A revenue commission applies the rate to the full sale amount. A margin commission applies it to gross profit, which is the sale amount minus the cost of goods sold. Margin plans pay less on discounted or low-profit deals, so they align your pay with profitability rather than raw volume.
How does a tiered commission work?
Each bracket of sales is paid at its own rate. If the first $25,000 pays 3% and the next band pays 5%, you earn 3% on the first $25,000 and 5% only on the amount above it. Your blended or effective rate ends up between the lowest and highest tier you reached.
Who pays the commission, the buyer or the seller?
It depends on the deal. Most often the seller pays, so the commission is deducted from the sale and the calculator shows the net the seller keeps. Sometimes the buyer pays, so it is added on top of the price and the calculator shows the full amount the buyer hands over.
Is the commission shown before or after taxes?
Before. The result is gross commission and gross total pay. Income tax, payroll taxes, and other deductions are withheld afterward, so your take-home amount will be lower than the figures here.