Commission Calculator

Calculate flat-rate or tiered sales commission

Direction

Find commission Find sale amount

Commission structure

Flat rate Tiered

Total sale amount ($)

Commission earned ($)

Commission rate (%)

Draw / advance already paid ($, optional)

Frequently Asked Questions

How do you calculate a flat-rate commission? ▼

Multiply the total sale amount (or total sales for the period) by the commission rate: commission = sale amount × rate. For example, a 5% commission on a $40,000 sale is $40,000 × 0.05 = $2,000.

How does tiered (graduated) commission work? ▼

A tiered structure pays a different rate on different portions of sales — for example, 3% on the first $50,000, 5% on the next $50,000, and 7% on everything above $100,000. Each tier's rate only applies to the amount that falls within that tier, not the whole sale — similar to how income tax brackets work.

What is a draw against commission? ▼

A draw is money advanced to a salesperson before commissions are earned, which gets subtracted from commission once it's calculated. If your draw exceeds what you earned in commission, some agreements require you to carry the difference forward or repay it — check your specific commission agreement.

Is this the same as what my employer will pay me? ▼

This gives a mathematical estimate based on the rate structure and numbers you enter. Actual commission plans often include additional rules — caps, accelerators, clawbacks for returns, or minimum quota requirements — that this calculator doesn't model.

Can I work backward from commission to find the sale amount? ▼

Yes — switch to "Find sale amount" mode, enter the commission you earned and the flat rate, and it divides commission by the rate to back into the original sale amount. This reverse calculation only works cleanly for a flat rate; a tiered structure can have multiple sale amounts producing the same commission total, so reverse mode is flat-rate only.

How commission is calculated

Flat rate: commission = sale amount × rate
Tiered (marginal): each tier's rate applies only to the part of sales inside that tier, like tax brackets
Reverse: sales needed = target commission ÷ rate
Draw: commission owed = gross commission − advance already paid

Examples

Flat: $40,000 in sales at 5% earns $2,000. Reverse: to earn $2,000 at 5%, you need $2,000 ÷ 0.05 = $40,000 in sales.

Tiered, with 3% up to $50,000, 5% from $50,000 to $100,000 and 7% above, on $120,000 of sales:

Tier	Sales in tier	Rate	Commission
1	$50,000	3%	$1,500
2	$50,000	5%	$2,500
3	$20,000	7%	$1,400
Total	$120,000		$5,400

Some plans are not marginal: reaching a higher tier applies the higher rate to all sales (here 7% × $120,000 = $8,400). Check which one your plan uses, since the difference is large.

Draws against commission

A draw is an advance paid each period and later subtracted from commissions earned. With a recoverable draw, a shortfall carries over and must be earned back. A non-recoverable draw works like a guaranteed minimum: if commissions fall short, you keep the draw. Under federal law, a non-exempt employee's total pay must still reach minimum wage for the hours worked.

Typical commission rates

Retail and inside sales: 1% to 10% of sales, often on top of an hourly wage
B2B and SaaS: usually 8% to 12% of first-year contract value
Car sales: about 20% to 30% of the dealer's gross profit, not the sale price
Real estate: a total of around 5% to 6% of the price, split between brokerages and agents; since 2024 the buyer's agent fee is negotiated separately

Taxes on commission

Commissions paid separately from regular wages are supplemental wages, and employers can withhold federal income tax at a flat 22%. That is withholding, not the final tax; see the effect on a check with the bonus paycheck calculator or the full paycheck calculator. To make a payment land at an exact net amount, use the gross-up calculator.