Enter a sale amount and a commission rate to see the commission earned and what is left for the business.
A sales commission is a percentage of a sale paid to whoever made it. Multiply the sale amount by the commission rate divided by 100. On a $2,000 sale at a 10 percent rate, the commission is $200, leaving $1,800 for the business. Commission is normally treated as taxable income.
Commission earned
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What Is a Sales Commission?
A sales commission is a share of a sale paid to the person who made it, set as a percentage of the sale value. It ties pay directly to results, which is why it is common in sales roles, real estate and many freelance arrangements.
Some plans pay commission on top of a base salary, while others are commission-only. Either way, the core calculation is the same: a percentage of what was sold.
How to Calculate Sales Commission
Commission = Sale amount x (Rate / 100)Multiply the sale amount by the rate as a decimal. On a $2,000 sale at a 10% rate, the commission is $200, leaving $1,800 for the business. The calculator shows both figures instantly.
How to Read Your Result
The main figure is the gross commission earned before any tax. The rate box repeats the percentage used, and the after-commission box shows what remains for the company, which is useful when you are checking how a deal splits.
More detail
Flat, Tiered and Split Rates
This tool uses a single flat rate, which fits most situations. If your plan pays a higher rate above a threshold, work out each tier separately and add the results. For splits between team members, apply the total commission first, then divide it.
If you are weighing a commission role against fixed pay, compare it with the salary calculator, or set an independent rate with the freelance rate calculator.
Commission and Tax
Commission is normally taxable income, so your take-home will be lower than the gross figure shown here. If the sale also carries sales tax, keep the two separate: calculate commission on the pre-tax sale value, and use the sales tax calculator for the tax itself.
What is a typical commission rate?
It ranges widely, commonly between 5 and 20 percent depending on the industry and how much of the pay is commission-based. Some roles use a lower rate on top of a base salary.
How do I handle tiered commission?
Split the sale into the amount that falls in each tier, apply that tier rate to each part, then add the pieces together. This calculator handles one flat rate at a time.
Is commission taxed?
Yes, commission is normally treated as taxable income. This tool shows the gross commission before any tax or deductions.
Should commission be on the pre-tax or post-tax amount?
Usually the pre-tax sale value. Calculate commission on the sale itself and treat any sales tax separately, since the tax is not the salesperson earnings.
Is my data saved?
No. The calculation runs in your browser and nothing you enter is stored.
Sources
- Commission: definition and types (Corporate Finance Institute).
- Understanding cost (Corporate Finance Institute).
- Managing small-business finances (U.S. Small Business Administration).
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This calculator is for general information and planning only and is not financial, tax, accounting or legal advice. Results are estimates based on the figures you enter. Confirm important decisions with a qualified professional. Spotted an error? Let us know.
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