Commission Calculator

Calculate your commission earnings from sales with flat or tiered rates.

Base Salary (Annual)

Optional - your guaranteed salary

Sales Amount

Monthly or period sales total

Use Tiered Commission

Different rates at different sales levels

Commission Rate

Enter your sales amount to calculate commission

Understanding Sales Commissions

Commission pay rewards salespeople based on their results. It can be the sole compensation or combined with a base salary. Understanding your commission structure helps you forecast income and evaluate job offers using our job comparison calculator.

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. Use our take-home pay calculator to estimate taxes, or check our bonus calculator for supplemental wage withholding.

Frequently Asked Questions

How do you calculate sales commission?

Multiply your sales amount by the commission rate. For example, if you sell $50,000 at 10% commission, you earn $5,000. For tiered structures, calculate each tier separately: first $20k at 5% = $1,000, next $30k at 8% = $2,400, total commission = $3,400.

What is a good commission rate?

Commission rates vary by industry. Typical ranges: SaaS sales 5-15%, retail 1-10%, real estate 2.5-3% per side, insurance 5-20%, recruiting 15-25% of first year salary. Higher rates often correlate with longer sales cycles and higher-value products.

What is OTE in sales?

OTE (On-Target Earnings) is your total expected compensation if you hit 100% of quota. It includes base salary plus expected commission. For example, $60k base + $40k commission at quota = $100k OTE. Always ask what percentage of reps actually achieve OTE.

Are commissions taxed differently than salary?

No, commission income is taxed the same as regular wages for your annual tax return. However, employers often withhold at a higher rate (22% federal supplemental wage rate) on commission checks. Use our take-home calculator to estimate taxes on variable income.

What is a commission draw?

A draw is a guaranteed minimum payment against future commissions. Recoverable draws must be paid back if your commission doesn't exceed it. Non-recoverable draws are yours to keep regardless. Always clarify which type when evaluating job offers.

How often is commission paid?

Payment schedules vary: monthly (most common), quarterly, or upon deal closure. SaaS companies often pay after customer payment clears. Some industries have clawback clauses if customers cancel within a certain period. Always ask about payment terms and conditions.