The formula
How it works
Commission is a slice of a sale paid to the person who made it. Enter the sale amount and the rate to see the commission earned and what is left for the seller — the basic sum behind sales pay, estate agent fees and affiliate deals.
FAQ
How is commission usually paid?
Often as a percentage of each sale, sometimes on top of a base salary. Some jobs use tiers, where the rate rises once you pass a sales target, or a split, where the commission is shared between people.
Is commission taken before or after tax?
Commission is part of your earnings, so income tax is applied to it like any other pay. This calculator shows the gross commission before any tax is deducted.
How does a tiered commission structure work?
A tiered structure raises the rate once sales pass set thresholds, so the first band of sales might earn 2% while anything above a target earns 4%. To model that here, run the calculator separately for each band and add the results together.
How does commission differ from a bonus?
Commission is calculated directly from a formula tied to sales, usually as a fixed percentage, so it scales automatically with performance. A bonus is typically a discretionary or target-based lump sum decided separately, even if it is also tied to sales results.
What is a commission draw?
A draw is an advance paid against future commission, giving a seller steady income before deals close. It is later deducted from the commission they earn, so this calculator’s gross commission figure is what the draw gets repaid from.
How is a split commission divided?
When two or more people share credit for a sale, such as a listing agent and a buyer’s agent, the total commission calculated here is divided between them by an agreed percentage, often 50/50 but sometimes weighted by who did more of the work.
Does a higher sale price always mean higher commission?
Yes, at a fixed rate commission scales directly with the sale amount, so a bigger sale always earns more before tax. Some agreements lower the rate on larger deals or cap the total, so check the specific terms if very large sales are involved.
About the commission calculator
This calculator works out a sales commission from the sale amount and the commission rate, and shows how much of the sale is left over. Commission is one of the oldest ways to pay for selling: instead of, or on top of, a fixed wage, the seller earns a percentage of what they sell. Turning that percentage into an exact figure is useful for salespeople checking their pay and for businesses planning what a deal really costs them.
How to use it
Enter the total sale amount and the commission rate as a percentage. The calculator shows the commission earned and the net amount left after it is paid. For example, an estate agent selling a $250,000 house at a 3% rate earns $7,500 in commission, leaving $242,500. Change the currency to match your market, and adjust the rate to model different deals or to see how a higher rate changes your take-home on the same sale.
The formula
Commission is the sale amount times the rate, , where is the sale and is the percentage rate. The amount left for the seller or business is simply . Tiered schemes apply different rates to different bands of sales and are added together, while a split commission divides between two or more people — but every version starts from this same basic percentage.
Where it is used
Commission drives pay in real estate, car sales, insurance, recruitment and retail, where staff often earn a percentage of what they sell. It underlies affiliate and referral marketing online, where a website earns a cut of sales it sends to a merchant, and broker fees in finance, where a percentage is charged on each trade. Anywhere someone is rewarded for making a sale, this simple percentage is doing the work behind the scenes.