How do I calculate my commission?
- 1Enter your sales for the period.
- 2Choose your plan: one flat rate, or tiers — either each slab at its own rate or all sales at the tier reached.
- 3Enter the rate, or the tier limits and rates.
- 4Add your base salary if you have one, and read the commission, total pay and effective rate.
How is tiered commission calculated?
- 01Flat: commission = sales × rate
- 02Tiered, each slab: Σ (sales in each tier × that tier's rate)
- 03Tiered, all sales: sales × rate of the highest tier reached
- 04Effective rate = commission ÷ sales
- 05Total pay = base salary + commission
A flat plan pays one percentage on everything: 5% of 300,000 is 15,000.
A slab plan (graduated, like income tax slabs) pays each part of the sales at its own rate. With 2% up to 100,000, 4% up to 250,000 and 6% above: 2,000 + 6,000 + 3,000 = 11,000 on 300,000 of sales — an effective 3.67%.
An "all sales at the tier reached" plan (sometimes called retroactive) pays the highest rate reached on every sale: 300,000 × 6% = 18,000. It rewards crossing a limit, but the jump at each limit can feel unfair, so check which kind your contract means.
Sales exactly on a limit count in the lower tier. Commission is usually paid before tax, so your take-home amount will be lower.
How much is 5% commission on 300,000?
Sales of 300,000 at a flat 5% commission earn 15,000.
With a base salary of 40,000, total pay is 55,000 — 27.3% of it from commission.
Good to know
- Ask whether a tiered plan pays slab by slab or on all sales at the tier reached — the difference can be large.
- Compare job offers by total pay at a realistic sales level, not by the headline rate.
- Check whether commission is paid on sales, on profit or only on money actually received.
- Watch the effective rate: it shows what a complicated plan really pays.
Commission questions
How do you calculate commission?
Multiply the sales by the commission rate. 5% commission on 80,000 of sales is 80,000 × 0.05 = 4,000. With tiers, work out each tier separately and add them up.
How does tiered commission work?
The rate rises as sales grow. In a slab plan each part of the sales gets its own rate — like tax slabs. In an all-sales plan, reaching a higher tier raises the rate on every sale. This calculator does both and shows each tier in a table.
How do I calculate salary plus commission?
Add the base salary and the commission for the same period. A 40,000 base plus 5% of 300,000 sales (15,000) gives 55,000 before tax.
What is a typical sales commission rate?
It depends on the trade and on whether there is a base salary. Plans with a good base often pay a few percent; commission-only jobs pay more. Real estate commissions are set by local custom and agreement, so always check the contract.
Is commission taxed?
In most countries commission is taxed as ordinary income together with your salary. This calculator shows amounts before tax.
Sources
- U.S. Department of Labor – Wages: commissions
- IRS Publication 15 – Commissions are taxed as supplemental wages (U.S.)
- Standard commission formulas: flat, graduated (slab) and retroactive tiered plans
Formulas last reviewed: September 30, 2026 ·How we check our formulas