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
Worked examples
Flat: $40,000 in sales at 6% with $2,500 base pay
- 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
- $10,000.00 at 5% = $500.00
- $15,000.00 at 7% = $1,050.00
- $5,000.00 at 10% = $500.00
- Marginal commission: $2,050.00 (effective 6.83%), total pay $4,550.00.
- Retroactive, all $30,000 at 10%: $3,000.00, total pay $5,500.00.
Commission table
| Sales | 2% | 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.
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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.
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