Sales Commission Calculator
Calculate commission on a sale at a single flat rate, or with tiered rates where each band of sales earns its own percentage. You can also work backwards from the commission you want to the sales you would need. Nothing is sent anywhere.
In one sentence: Commission is a percentage of a sale paid to whoever made it; tiered plans pay each band of the sale at its own rate.
Formula: flat: commission = sale × rate%; tiered: sum of (sales within each tier × that tier's rate%); sales for target = target ÷ rate%.
Flat and tiered commission
A flat commission is the simplest arrangement: one percentage on the whole sale. Seven percent of 25,000 is 1,750, and the effective rate is the same seven percent. Many agents, referral partners and freelance sales reps work this way because everyone can check the figure in their head.
Tiered plans pay different rates on different slices of the sale. In the example loaded above, the first 10,000 earns 5%, the part between 10,000 and 50,000 earns 8%, and anything above 50,000 earns 10%. On a 60,000 sale that is 500 plus 3,200 plus 1,000, for 4,700 in total. The rate does not jump for the whole amount when a threshold is crossed; only the part above the threshold earns more. This is sometimes called marginal or progressive commission.
Tiered plans are popular because they reward bigger deals without overpaying on small ones. For the person earning commission, they also mean the extra money on a large sale is higher than the average suggests: in the example, each additional unit of sales above 50,000 earns 10%, even though the overall rate is lower. Knowing the rate on the next sale, not just the average, helps when deciding where to spend effort.
Reading the effective rate
The effective rate is total commission divided by total sales. In the tiered example it is about 7.83%, lower than the top rate of 10% because the early slices were paid at less. It is the most useful single figure for comparing two plans, or for checking whether a plan with an attractive headline rate actually pays more on the deals you usually close.
Some plans work differently. A "retroactive" or "cliff" plan pays the higher rate on the whole amount once a threshold is reached. That is not what this calculator does. If your plan works that way, use flat mode with the rate that applies to your total. Other plans pay a fixed bonus for reaching a threshold rather than a higher percentage; add that bonus to the result yourself. Read your agreement carefully, because the wording decides which method applies, and plans vary widely.
Working back from a target
Target mode answers a planning question: how much do I need to sell to earn a given amount? Divide the target commission by the rate. To earn 3,000 at 6%, you need 50,000 in sales. If you set income goals for the year, the revenue goal calculator can break that sales figure into monthly or weekly targets.
If you pay commission to someone else, such as a referral partner or subcontractor who brings in work, the same arithmetic tells you what each deal really costs. Commission is a cost of sale, so it belongs in your pricing: a quote that ignores a 10% referral fee takes 10% of the quote. The markup and margin calculator can help you price with that in mind. Agree the rate and the basis, such as invoiced or paid amounts, in writing before the first deal closes.
Frequently asked questions
Is commission calculated before or after tax?
That depends on your agreement. This tool applies the rate to whatever amount you enter.
Can I use fewer than three tiers?
Yes. Clear both fields of any tier you do not need. To drop the last tier, also clear the upper limit of the tier above it.
What about refunds or cancelled deals?
Rules for clawing back commission vary by contract. Subtract the refunded amount from sales and recalculate if your plan works that way.
Is my data stored?
No. Everything runs in your browser.