Commission Calculator
Calculate sales commissions using flat rates or tiered graduated structures to understand your earnings at different sales levels.
About this Calculator
Calculate sales commissions using flat rates or tiered graduated structures to understand your earnings at different sales levels.
Formula & Calculations
Formula
Flat: Commission = Sales × Rate / 100; Tiered: Sum of (Sales in Tier × Tier Rate / 100) for each tierWhere:
- S=Total sales amount
- R=Commission rate (flat percentage)
- T1=Tier 1 commission rate applied up to the tier 1 cap
- T2=Tier 2 commission rate applied between tier 1 cap and tier 2 cap
- T3=Tier 3 commission rate applied above tier 2 cap
Assumptions
- Flat rate applies a single percentage to all sales.
- Tiered rates are graduated: each tier's rate applies only to sales within that band.
- Does not account for draws against commission, clawbacks, or team splits.
- Tier caps represent the upper boundary of each tier's sales range.
Calculation Examples
Example 1
A simple 5% commission on $85,000 in sales yields $4,250.
Example 2
Tier 1: $25,000 × 3% = $750; Tier 2: $25,000 × 5% = $1,250; Tier 3: $35,000 × 8% = $2,800. Total = $4,800.
Example 3
Tier 1: $1,000; Tier 2: $2,000; Tier 3: $3,000, totaling $7,500. Higher sales earn more as they climb into higher-rate tiers.
Frequently Asked Questions
What is the difference between flat and tiered commission?
Flat commission applies a single rate to all sales. Tiered (or graduated) commission applies different rates to different sales bands, typically with higher rates for higher sales volumes to incentivize higher performance.
What is a draw against commission?
A draw is an advance against future commissions, common in sales roles. If your earned commissions fall below the draw amount, you may owe the difference back. Some companies offer non-recoverable draws that you keep regardless of performance.