How to use this commission calculator
- Commission plan — choose Flat rate if one percentage applies to all your sales, Tiered if the rate rises as your sales grow, or Target to work backwards from the commission you want to earn.
- Pay period — per month or per year. Enter your sales, base salary and tier limits for the same period; the calculator doesn’t convert between them.
- Sales and rates — your sales for the period and your commission rate. In tiered mode, enter where tier 1 and tier 2 end and a rate for each of the three tiers. Tick retroactive tiers if your plan pays the top rate you reach on all of your sales.
- Base salary (optional) — any fixed pay for the same period, so you can see your total pay and how much of it depends on sales.
The results update as you type. The last table shows what you would earn at 50% to 150% of your sales, a quick way to see how much a slow or a strong period changes your pay.
How commission is calculated
A flat rate is a single multiplication. Tiered plans work like tax brackets: each rate applies only to the sales inside its band, so moving into a higher tier raises the rate on your next dollar of sales, not on the ones before it. Some plans instead pay the top-tier rate on everything once you reach that tier. These are called retroactive tiers.
The effective rate is the share of your sales you actually receive as commission, which makes it the fairest single number for comparing plans.
Worked example
These are the calculator’s default inputs: $60,000 of sales in a month at an illustrative 5% flat rate, with a $2,500 monthly base salary.
- Commission: $60,000 × 0.05 = $3,000.00.
- Total pay: $2,500 + $3,000 = $5,500.00, so commission makes up 54.5% of your pay.
Switch to Tiered and the same $60,000 runs through the default tiers: 3% on sales up to $25,000, 5% from $25,000 to $50,000, and 8% above $50,000.
| Band | Sales in band | Rate | Commission |
|---|---|---|---|
| Up to $25,000 | $25,000 | 3% | $750.00 |
| $25,000 to $50,000 | $25,000 | 5% | $1,250.00 |
| Above $50,000 | $10,000 | 8% | $800.00 |
| Total | $60,000 | 4.67% effective | $2,800.00 |
Your commission is $2,800.00, an effective rate of 4.67%, and your total pay is $5,300.00. Only the last $10,000 earns 8%. If the tiers are retroactive, all $60,000 is paid at 8% instead: $4,800.00 of commission and $7,300.00 of total pay.
In Target mode, the default asks what sales you need to earn $4,000 of commission at 5%: $4,000 ÷ 0.05 = $80,000 of sales, for total pay of $6,500.00.
Tiered vs. retroactive: why the plan type matters
Here is the commission at 50% to 150% of the default $60,000 under each plan type, using the default tiers and a 5% flat rate:
| Sales | Flat 5% | Tiered | Retroactive |
|---|---|---|---|
| $30,000 | $1,500.00 | $1,000.00 | $1,500.00 |
| $45,000 | $2,250.00 | $1,750.00 | $2,250.00 |
| $60,000 | $3,000.00 | $2,800.00 | $4,800.00 |
| $75,000 | $3,750.00 | $4,000.00 | $6,000.00 |
| $90,000 | $4,500.00 | $5,200.00 | $7,200.00 |
Retroactive tiers create a cliff at each limit. At exactly $50,000 of sales, the retroactive plan pays $2,500.00, with everything at 5%. One more dollar moves you into tier 3 and the payout jumps to $4,000.08. Under the ordinary tiered plan, that same dollar adds 8 cents. If your plan is retroactive, a deal that closes just inside or just outside a period can be worth a lot, so check how your plan counts the timing of sales.
What this calculator does not include
- Tax. All figures are before tax and other deductions. Employers often withhold tax on commission differently from salary, so your paycheck may not match.
- Draws, caps and clawbacks. Some plans pay an advance (a draw) against future commission, cap what you can earn, or take commission back when a customer cancels.
- What the rate is paid on. The rate is applied to the figure you enter. If your plan pays on gross profit or on collected revenue, enter that figure instead of sales.
- Longer measuring periods. Tier limits apply to one period’s sales. A plan that measures tiers over a quarter or a year pays differently from month to month.
Selling homes? The real estate commission calculator splits a sale’s commission between the agents, their brokerages and the seller.
Frequently asked questions
How do I calculate commission on my sales?
Multiply your sales by the rate written as a decimal: $60,000 × 0.05 = $3,000. For a tiered plan, work out each band separately and add the results, as in the table above.
Why is my effective rate lower than my top rate?
With ordinary tiers, the higher rate only applies to sales above each limit. In the example the top rate is 8%, but the effective rate is 4.67%, because $50,000 of the $60,000 earns 3% or 5%.
How do I compare a higher base salary with a higher commission rate?
Compare total pay at the same sales. A $2,500 base plus 5% and a $3,500 base plus 3% pay the same, $5,000.00, at $50,000 of sales. Above that the 5% plan pays more; below it the higher base wins, paying $4,400.00 against $4,000.00 at $30,000.
My pay changes every month. How should I budget?
Base your budget on your salary plus a cautious commission figure, such as the 50% or 75% row of the table, and save the extra in strong months. The savings goal calculator shows how long a cash buffer takes to build.
Can I save my calculation?
Members can save any calculation, including the plan type and tier settings, and reopen it later from their account. The calculator itself is free for everyone, with instant results and no sign-up. See membership.
Results are estimates for educational purposes and are not financial advice. See our disclaimer.