Calculate exactly how much commission you earn (or pay) on any sale.
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Commission Calculator
Enter the sale amount and commission rate
$
Commission Earned
$100.00
Sale Amount$1,000.00
Net to Seller/Company$900.00
Commission = Sale Amount × Rate. Adjust the rate to match your specific agreement, tier, or industry standard.
How Commission Is Calculated
Commission is a share of a sale paid to the person or business that made it happen: a salesperson, an agent, an affiliate, or a marketplace. The basic calculation is simple, but real pay plans often add tiers, bases, and caps, so it's worth checking the math before a payout is approved.
Commission = Sale Amount × (Rate ÷ 100)
Net After Commission = Sale Amount − Commission
Sales Needed for a Target = Target Commission ÷ (Rate ÷ 100)
Worked Example: Flat Rate
A $1,000 sale at a 10% commission rate:
Commission = $1,000 × 0.10 = $100
Net to the seller or company = $1,000 − $100 = $900
Working backwards: if a salesperson on 10% wants to earn $3,000 in a month, they need $3,000 ÷ 0.10 = $30,000 in sales.
Worked Example: Tiered Commission
Many plans pay a higher rate as sales grow. Here's a common structure applied to $30,000 of monthly sales:
Sales band
Rate
Sales in band
Commission
$0 – $10,000
5%
$10,000
$500
$10,001 – $25,000
8%
$15,000
$1,200
Above $25,000
10%
$5,000
$500
Total
$2,200
This is a graduated plan: each rate applies only to the sales inside its band. Some plans are retroactive instead, meaning once you reach a tier the higher rate applies to all sales. Under a retroactive plan the same $30,000 would pay 10% on everything, or $3,000. Always confirm which type your agreement uses — the difference here is $800. To check a tiered plan with this calculator, run each band separately and add the results.
Worked Example: Base Salary Plus Commission
A rep earns a $2,500 monthly base plus 4% of sales and closes $40,000 in a month. Commission = $40,000 × 0.04 = $1,600, so total pay = $2,500 + $1,600 = $4,100. Base-plus-commission plans usually use lower rates than commission-only plans because part of the pay is guaranteed.
Other Common Commission Structures
Gross-margin commission: the rate applies to profit instead of revenue, which discourages heavy discounting. Our profit margin calculator gives you the profit figure to use.
Draw against commission: the rep receives an advance each period that is later deducted from commission earned.
Split commission: one commission is shared between several people, such as agents and brokerages in a real-estate deal.
Residual commission: recurring payments for as long as a customer keeps paying, common in subscriptions and insurance.
Marketplace Fees Are Commissions Too
If you sell online, you're paying commission on every sale even if it isn't called that. eBay's final value fee and Amazon's referral fee are both percentage-of-sale charges. For platform-specific rates, use our eBay and Amazon fee calculators, which include the extra fixed and category-specific charges a simple percentage misses.
Frequently Asked Questions
How do you calculate commission?
Multiply the sale amount by the commission rate written as a decimal. A 10% commission on a $1,000 sale is $1,000 times 0.10, which equals $100.
What is the difference between graduated and retroactive tiered commission?
In a graduated plan, each rate applies only to the sales within its band. In a retroactive plan, reaching a higher tier applies that higher rate to all sales in the period. Retroactive plans pay more at the same sales level.
How much do I need to sell to earn a specific commission?
Divide the commission you want by the rate as a decimal. To earn $3,000 at a 10% rate, you need $30,000 in sales.
Is commission calculated before or after discounts and returns?
It depends on the agreement, but most plans calculate commission on the net amount actually collected after discounts and returns. Check your written plan to be sure.
What is a typical commission rate?
Rates vary widely by industry. Retail sales roles often pay low single-digit percentages, while affiliate programs and independent agents may earn much higher rates. Compare against the norms in your industry and the terms of your agreement.
Is commission taxable income?
In most countries, yes. Commission paid to employees is usually taxed like wages, while independent contractors typically report it as self-employment or business income. Check local rules or ask a tax professional.