Commission Calculator
Calculate sales commissions with simple, tiered, or base salary + commission structures
Simple Commission Calculator
Total Commission
$2,500.00
5% of $50,000.00 in sales
Monthly Average
$208.33
Bi-Weekly Average
$96.15
Effective Rate
5%
Commission Structures Explained
Simple Commission
A flat percentage of all sales. Example: 5% of $100,000 = $5,000 commission. Simple and transparent.
Tiered Commission
Different rates for different sales levels. Encourages selling more by rewarding higher volumes with better rates.
Base + Commission
Guaranteed salary plus commission earnings. Provides income stability while rewarding sales performance.
Common Commission Rates by Industry
| Industry | Typical Rate | Notes |
|---|---|---|
| Real Estate | 5-6% | Split between buyer and seller agents |
| Insurance | 5-15% | Higher for new policies, lower for renewals |
| Auto Sales | 20-25% | Based on profit margin, not sale price |
| SaaS/Software | 10-20% | Often includes accelerators above quota |
| Retail | 1-5% | Usually combined with hourly wage |
| Financial Services | 1-3% | Based on AUM or transaction value |
| Affiliate Marketing | 5-30% | Varies widely by product type |
Commission Calculation Examples
Simple 5% Commission
Sales: $80,000
Commission: $80,000 × 5% = $4,000
Tiered Commission
Sales: $120,000
First $50K @ 3% = $1,500
Next $50K @ 5% = $2,500
Remaining $20K @ 8% = $1,600
Total: $5,600 (4.67% effective rate)
Base + Commission with Quota Bonus
Base: $50,000
Sales: $150,000 (Quota: $100,000)
Standard Commission (5%): $7,500
Bonus (2% on $50K over quota): $1,000
Total Compensation: $58,500
Frequently Asked Questions
What is a good commission rate?
It depends on the industry and whether you have a base salary. Commission-only roles typically offer 20-30%, while base + commission roles offer 5-15%. Consider total on-target earnings (OTE) rather than just the commission rate.
How do sales quotas work?
A quota is a sales target, usually set monthly, quarterly, or annually. Meeting quota often triggers full commission rates or bonuses. Many companies offer accelerators (higher rates) for exceeding quota.
What is a draw against commission?
A draw is an advance payment against future commissions. If commissions exceed the draw, you keep the difference. If not, you may owe the company (recoverable draw) or the company absorbs the loss (non-recoverable draw).
When should I negotiate commission rate vs. base?
If you're confident in your sales abilities, negotiate higher commission. If the territory is unproven or you're new to sales, prioritize base salary for stability. Always consider total OTE.
Tips for Sales Professionals
Understand your comp plan: Know exactly when commissions are paid (on booking, billing, or collection), clawback policies, and how quota retirement works.
Track everything: Keep your own records of deals, commissions earned, and payments received. Discrepancies happen more often than you'd think.
Calculate your effective rate: After taxes and expenses (gas, meals, etc.), what percentage do you actually keep? This is your true commission rate.
Plan for variable income: Commission income fluctuates. Budget based on your worst month, save during good months, and maintain an emergency fund.