How to use the Commission Calculator
- Enter your total sales for the period.
- Enter your commission rate.
- If your plan has a quota, enter it and the higher rate for sales above it. Leave the quota at 0 for a flat rate.
- Add your base pay and read the commission and total earnings.
Formula used
With a quota: commission = rate × sales up to the quota + rate above quota × sales beyond it. With no quota: commission = rate × sales. Total = commission + base pay.
Worked example
Here is the Commission Calculator worked through with the example values shown above, so you can check each step by hand.
| Inputs | |
|---|---|
| Total sales | $80,000 |
| Commission rate | 5 % |
| Quota (0 if there is none) | $50,000 |
| Rate on sales above quota | 8 % |
| Base pay | $2,000 |
| Result | |
| Commission | $4,900.00 |
| Total earnings | $6,900.00 |
| Commission as a share of sales | 6.13% |
Earnings at different sales levels
For the default plan: 5% up to a 50,000 quota and 8% above it, with 2,000 base pay.
| Total sales | Commission | Total earnings |
|---|---|---|
| $30,000 | $1,500.00 | $3,500.00 |
| $50,000 | $2,500.00 | $4,500.00 |
| $80,000 | $4,900.00 | $6,900.00 |
| $100,000 | $6,500.00 | $8,500.00 |
| $150,000 | $10,500.00 | $12,500.00 |
Flat and tiered commission
With a flat rate, commission = sales × rate. On $80,000 of sales at 5% that is $4,000. With a tiered plan, the rate steps up above the quota: 5% on the first $50,000 is $2,500, and 8% on the remaining $30,000 is $2,400, giving $4,900 in total.
Add the $2,000 base pay and total earnings are $6,900, which means commission averages 6.13% of sales.
What if you miss the quota
Below the quota only the base rate applies. On $30,000 of sales, the commission is $1,500 and total earnings $3,500. The sweep table above shows how earnings rise at several sales levels.
Some plans are stricter, paying nothing below the quota or applying the higher rate to all sales once it is met (a "cliff"). This calculator uses the common marginal approach, so check how your own plan is written.
Setting a target
To work out the sales needed for a target income, rearrange the formula. With a flat rate, sales needed = (target − base) ÷ rate. To earn 6,000 in total on 2,000 base at 5% flat, you need 4,000 ÷ 0.05 = 80,000 of sales.
Try different sales numbers in the calculator to find where you cross your goal. The results update as you type.
Things that change the take-home amount
Commission is taxed as income, and may be paid late, after returns or cancellations, or with clawbacks. A draw is an advance against future commission, which this calculator does not model.
Always read the plan for what counts as a sale, how refunds are treated and when payment is made. The figures here are gross, before tax.
Frequently asked questions
How is sales commission calculated?
Multiply sales by the commission rate. With a tiered plan, apply each rate to its own slice of sales.
What is a quota?
A sales target. In this calculator, sales above the quota earn the higher rate.
Does the higher rate apply to all sales?
Only to the part above the quota here. Some employers apply it to everything once the quota is met, so check your plan.
Is the result before tax?
Yes. All amounts are gross earnings before income tax and deductions.
What is a typical commission rate?
It varies a lot, from a few percent on high-value goods to 10 to 20% or more on some services. Use the rate from your own agreement.
Does it work for any currency?
Yes. Use the currency selector to change the symbol and format.
This calculator gives estimates for information only. Actual figures from a bank, employer, tax authority or doctor may differ. It is not financial, tax, legal or medical advice.