Commission Calculator
Calculate sales commissions with flat, percentage, or tiered rates. Reverse-calc required sales from a target commission and compare two commission plans side by side.
Commission calculator
Tiered commission (optional)
Define tiers as cumulative sales thresholds. The rate applies only to the portion of sales within each tier.
Results
Enter your sales, rate, and optional tiers, then click “Calculate commission” to see the breakdown.
How this commission calculator works
This tool is designed for sales reps, managers, and small-business owners who need to quickly estimate commissions, test different plans, or understand how much sales are required to hit an income target.
1. Basic commission formula
For a simple percentage-based commission, the formula is:
Commission = Sales × Commission rate
Example: 7% commission on $12,000 of sales:
Commission = 12,000 × 0.07 = $840
2. Flat commission per deal
Some plans pay a flat amount per closed deal, in addition to (or instead of) a percentage of sales.
Flat commission = Flat amount per deal × Number of deals
The calculator lets you combine percentage and flat commissions and shows the total.
3. Tiered commission structures
Tiered commissions pay different rates on different portions of sales. For example:
- 3% on the first $10,000
- 5% on the next $20,000 (from $10,000 to $30,000)
- 8% on any sales above $30,000
In this case, the blended commission rate increases as sales grow. The calculator applies each rate only to the sales that fall within its tier and shows a detailed breakdown.
4. Draws and minimum guarantees
Many commission plans include a draw (an advance against future commissions) or a minimum guarantee (a floor below which your commission cannot fall).
- Draw: The tool subtracts the draw from your calculated commission to show your net payout.
- Minimum guarantee: If your calculated commission is below the guarantee, the calculator bumps it up to the guaranteed amount.
5. Reverse: required sales for a target commission
If you know how much commission you want to earn, you can rearrange the basic formula:
Sales = Commission ÷ Commission rate
For example, to earn $3,000 at a 10% rate, you need:
Sales = 3,000 ÷ 0.10 = $30,000
The reverse mode performs this calculation for you and can also factor in flat per-deal commissions.
Practical examples
Example 1: Simple percentage commission
- Sales: $25,000
- Rate: 6%
Commission = 25,000 × 0.06 = $1,500
Example 2: Tiered commission
- Tier 1: 0–10,000 at 3%
- Tier 2: 10,000–30,000 at 5%
- Tier 3: above 30,000 at 8%
- Total sales: $40,000
Breakdown:
- Tier 1: 10,000 × 3% = $300
- Tier 2: 20,000 × 5% = $1,000
- Tier 3: 10,000 × 8% = $800
Total commission = $300 + $1,000 + $800 = $2,100
Example 3: Comparing two plans
Assume $50,000 in sales and 10 deals:
- Plan A: 6% of sales, no flat per-deal
- Plan B: 4% of sales + $100 per deal
Plan A: 50,000 × 0.06 = $3,000
Plan B: 50,000 × 0.04 + 100 × 10 = 2,000 + 1,000 = $3,000
At $50,000 in sales, both plans pay the same. The comparison mode helps you find the break-even point and see which plan is better at different sales levels.
Frequently asked questions
How do you calculate a simple commission?
Multiply your commission rate (as a decimal) by your sales amount. For example, 7% of $12,000 is 0.07 × 12,000 = $840.
What is a tiered commission structure?
A tiered structure pays different rates on different portions of sales, usually to reward higher performance. The calculator lets you define tiers and automatically computes the blended effective rate.
Are commissions based on gross or net sales?
It depends on your agreement. Some companies use gross sales; others use net of discounts, returns, or taxes. Always check your written plan. In this calculator, you can input whichever sales figure your plan uses.
Can I use this for hourly or salary plus commission?
Yes. Use the tool to calculate the commission portion, then add it to your base salary or hourly pay outside the calculator.
Does this calculator account for taxes or deductions?
No. It focuses on gross commission and optional draws/guarantees. To estimate your take-home pay after taxes, you can combine the results with an income or payroll tax calculator.