About the Commission Calculator
This commission calculator shows what a sales figure is worth under the three plan types most companies use. A flat plan pays one rate on every dollar. A tiered (marginal) plan pays a higher rate only on sales above each threshold, like tax brackets. A retroactive tier plan pays the highest rate reached on all sales once you cross a threshold — which makes the last deal before a tier very valuable.
Enter your sales for the period, pick the plan type and rates, and add your base salary for the same period. You get the commission, total pay, the effective commission rate across all sales, and a breakdown of how much each tier contributed.
Sales reps use it to forecast paychecks and check statements, managers use it to design and compare comp plans, and real estate or recruiting professionals can use the flat mode for a single deal. All amounts are gross, before tax, and ignore draws, clawbacks and quota multipliers.
With the default inputs, the commission earned is $3,000.00. Change any value above to recalculate instantly.
How to use the commission calculator
- 1Enter your total sales for the pay period.
- 2Choose flat, marginal tiered or retroactive tiered commission.
- 3Enter the rate, or the tier thresholds and rates from your comp plan.
- 4Add your base salary for the same period.
- 5Read commission, total pay and the per-tier breakdown.
Formula and method
A flat commission multiplies total sales by one rate. A marginal tiered plan splits sales into bands — for example the first $20,000 at 3%, the next $30,000 at 5% and everything above $50,000 at 8% — and adds the commission from each band, so crossing a threshold only raises the rate on the dollars above it.
A retroactive (or “cliff”) plan pays the rate of the highest tier reached on every dollar of sales, so commission jumps when a threshold is crossed. The effective rate is total commission divided by total sales, and total pay adds the base salary for the same period.
- C
- Commission earned
- S
- Sales (revenue credited to you) for the period
- r
- Commission rate
Worked examples
5% flat commission on $60,000 of sales
$60,000 × 5% = $3,000 commission. With a $2,000 base the rep earns $5,000 for the period, 60% of it from commission.
Marginal tiers: 3% / 5% / 8%
The first $20,000 earns $600 (3%), the next $30,000 earns $1,500 (5%) and the last $10,000 above $50,000 earns $800 (8%), for $2,900 — an effective 4.83%.
Retroactive tiers on the same sales
Because sales passed $50,000, the 8% tier-3 rate applies to all $60,000, paying $4,800 — $1,900 more than the marginal version of the same plan.
10% on a $120,000 deal, no base
A straight 10% commission on $120,000 is $12,000, and with no base salary it is the entire paycheck.
Frequently asked questions
How do you calculate commission?+
Multiply the sales amount by the commission rate as a decimal. A 6% commission on $25,000 of sales is $25,000 × 0.06 = $1,500. Tiered plans apply different rates to different bands of sales and add them up.
What is a typical sales commission rate?+
There is no standard rate — it depends on margins, deal size and how much of pay is base salary. High-volume, low-margin sales (retail, cars) usually pay a low single-digit percentage of revenue or a share of gross profit, while B2B software plans often pay around 10% of first-year contract value. Real estate commissions are negotiable and split between agents and brokers.
What is the difference between marginal and retroactive tiers?+
In a marginal plan each rate only applies to sales inside its band. In a retroactive plan, reaching a higher tier re-rates all sales at that higher rate, so commission jumps sharply when you cross a threshold.
Is commission taxed differently from salary?+
In the US, commission is supplemental wages. When paid separately from regular wages, employers may withhold federal tax at a flat 22% (37% on supplemental wages above $1 million in a year), per IRS Publication 15 for 2026. It is still ordinary income, so your final tax depends on your total income.
What is a draw against commission?+
A draw is an advance paid each period that is later deducted from commission earned. If commission is lower than the draw, a recoverable draw carries the shortfall forward; a non-recoverable draw does not.