Commission Calculator
Calculate commission earnings from sales, with an optional higher rate above a quota, plus base salary.
Free · No sign-up · Runs in your browser · Last reviewed November 2026
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About the Commission Calculator
Commission pay rewards sales performance. This commission calculator handles a flat rate and an optional tiered structure, where a higher rate applies to sales above a quota. Add a base salary to see total earnings for the pay period and your effective commission rate.
How to use it
- Enter your total sales and your commission rate.
- Optionally enter a quota and the higher rate that applies above it.
- Add any base pay and press Calculate commission.
Commission formulas
- Flat: commission = sales × rate.
- Tiered: commission = quota × base rate + (sales − quota) × higher rate.
- Total pay = base pay + commission.
Example
Sales of $80,000, a 5% rate up to a $50,000 quota and 8% above: $50,000 × 5% = $2,500, plus $30,000 × 8% = $2,400, for $4,900 in commission. With $2,000 base pay, total pay is $6,900.
Typical commission rates
| Role | Common range |
|---|---|
| Retail | 1% to 10% |
| Real estate agents | 2.5% to 3% per side |
| Software sales | 5% to 15% of contract value |
| Insurance | 5% to 20% first year |
Commission plans: another example and what to check
Imagine $120,000 in sales with a 4% rate up to a $75,000 quota and 7% above it. The first part earns $3,000 and the remaining $45,000 earns $3,150, for $6,150 in commission. That works out to an effective rate of 5.125%, which is higher than 4% but lower than 7%. With a $2,500 base, total pay is $8,650.
Questions to ask about your plan
- What counts as a sale? Plans may pay on booked orders, invoiced revenue or collected cash, and the timing changes when you are paid.
- Is it based on revenue or profit? A 10% commission on gross profit can be much smaller than 10% of revenue.
- Do accelerators apply retroactively? Some plans pay the higher rate on all sales once you pass the quota, not only on the excess. The tiered formula here pays the higher rate only on the excess.
- Are there clawbacks or draws? Returns, cancellations or an advance against future commission can reduce later checks.
Commission is typically treated as supplemental wages for withholding; see the bonus tax calculator for an estimate of what you would take home.
Frequently asked questions
How do I calculate commission?
Multiply sales by the commission rate. For tiered plans, apply each rate to its portion of sales.
What is a commission rate?
The percentage of a sale the salesperson earns.
Is commission taxed differently?
Commission is supplemental wage income, and employers often withhold 22% federal tax on it. Use the bonus tax calculator for take-home.
What is a draw against commission?
An advance paid against future commission that you later repay out of earnings.
What is an average commission rate?
It varies widely by industry, from about 1% to over 20%.
What is a draw against commission?
A draw is an advance paid to a salesperson that is later deducted from earned commission. Some draws are recoverable if you do not earn enough, while others are not, so check your agreement.
What is the difference between commission and markup?
Commission is a percentage of the sale paid to the salesperson, while markup is a percentage added to cost to set the selling price. They are unrelated figures.
Last reviewed: November 2026. Estimates only, not tax, legal or financial advice.