Commission Calculator
Calculate your commission earnings from sales with flat or tiered rates.
Optional - your guaranteed salary
Monthly or period sales total
Different rates at different sales levels
Understanding Sales Commissions
Commission pay rewards salespeople based on their results. It can be the sole compensation or combined with a base salary.
Commission Structure Types
Flat Rate
A simple percentage of all sales. Easy to understand and calculate.
Example: 10% on all sales
Tiered Commission
Higher rates for higher sales volumes, incentivizing top performance.
- First $50,000: 5%
- $50,001 - $100,000: 8%
- Over $100,000: 12%
Commission with Draw
A guaranteed minimum ("draw") that commission must exceed. If commission falls short, you keep the draw but may need to pay it back later.
Residual Commission
Ongoing commission for recurring revenue (common in SaaS, insurance).
Typical Commission Rates by Industry
| Industry | Typical Rate |
|---|---|
| Real Estate | 2.5-3% per side |
| Retail | 1-10% |
| SaaS/Software | 5-15% |
| Insurance | 5-20% first year |
| Recruiting | 15-25% of first year salary |
Evaluating Commission-Based Jobs
When considering a commission role, ask:
- What's the on-target earnings (OTE)?
- What percentage of reps hit their quota?
- Is there a base salary or pure commission?
- What's the ramp period for new hires?
- Are there clawbacks if customers cancel?
- When and how is commission paid?
Commission Taxes
Commission income is taxed like regular income. If you have variable income, consider making quarterly estimated tax payments to avoid penalties.