This commission calculator works out sales commission for flat-rate and tiered plans. Add your base pay to see your total earnings and the effective commission rate across all tiers.
| Sales up to (blank = and above) | Rate % |
|---|---|
How commission is calculated
Flat rate: commission = sales × commission rate
Tiered (graduated): each tier’s rate applies only to the sales inside that tier, like tax brackets. Selling more raises the rate on extra sales, not on everything you sold before.
Worked example
A rep sells $50,000 on a plan paying 3% up to $20,000, 5% from $20,000 to $50,000 and 8% above that. Commission is $20,000 × 3% + $30,000 × 5% = $2,100, an effective rate of 4.2%. On a flat 5% plan, the same sales would earn $2,500.
Common commission structures
| Structure | How it pays |
|---|---|
| Straight commission | Commission only, no base pay |
| Base plus commission | Fixed salary plus a percentage of sales |
| Tiered commission | Higher rates as sales pass set levels |
| Draw against commission | An advance repaid from future commission |
| Gross margin commission | A percentage of profit rather than sales |
Real estate commission
For a home sale, enter the sale price and the agent’s percentage as a flat rate. Commission rates are negotiable. In the US, since August 2024, offers of pay to a buyer’s agent can no longer be advertised on the MLS, and buyers sign a written agreement with their own agent that states how that agent is paid.
Frequently asked questions
How do I calculate commission on sales?
Multiply the sales amount by the commission rate. At 6%, $40,000 in sales earns $40,000 × 0.06 = $2,400.
How does tiered commission work?
Each rate applies only to the sales within its range. Reaching a higher tier increases pay on the sales above that level, not retroactively on all sales, unless your plan says otherwise.
Is commission taxed differently from salary?
In the US, employers may withhold federal income tax on commissions as supplemental wages at a flat 22%, but the final tax is the same as on regular income when you file.
What is a typical sales commission rate?
It varies widely by industry, from around 2% to 3% on high-value items to 20% or more on software or services.
What is effective commission rate?
Total commission divided by total sales. It shows the average rate you earned across all tiers.
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Sources
Last reviewed: October 2026. This calculator is for education only and is not financial, tax or legal advice.