Sales Commission Calculator

Sales commission is pay worked out as a percentage of the revenue or gross profit a salesperson brings in.
Structures vary a lot: a flat percentage, tiers that step up with volume, splits between two reps on one deal, or a draw advanced against future earnings.

Flat commission formula: Commission = Sale Amount × Commission Rate

Tiered commission formula (most common): Each tier applies only to sales within that tier’s range: Total Commission = Σ (Tier Sales × Tier Rate)

Gross profit commission: Commission = (Sale Price − Cost of Goods) × Commission Rate

Draw against commission: Net Commission = Total Earned Commission − Draw Amount (If earned < draw, the shortfall is carried forward as a debt against future earnings)

What each variable means:

• Sale Amount: the total revenue of the transaction (gross sales)
• Commission Rate: the percentage paid to the salesperson; ranges from 1% (real estate brokerages) to 30%+ (high-ticket SaaS, direct sales)
• Tiered rates: incentivize higher performance. Example: 5% on first $50K, 7% on $50K–$100K, 10% above $100K
• Draw: a guaranteed base advance against future commissions; protects reps during slow periods but must be repaid from commissions

Reference: typical commission rates by industry

• Real estate (agent): 2.5–3% of sale price
• Insurance: 5–15% of annual premium
• Software/SaaS: 8–12% of annual contract value
• Retail: 2–5% of sales
• Pharmaceutical (outside sales): 5–10%
• Car sales: 20–25% of dealer profit margin (not sale price)

Worked example, flat rate

This is the one the boxes above reproduce. Enter $150,000 of sales, a 10% rate, and a $3,000 base salary:

• Commission = $150,000 × 10% = $15,000
• Total earnings = $3,000 base + $15,000 = $18,000
• Effective rate on sales = 10.0%

Worked example, tiered

Most real plans step up with volume. On $135,000 of monthly sales against a 5 / 7 / 10 structure:

• 5% on the first $50,000 = $2,500
• 7% on the next $50,000 (to $100,000) = $3,500
• 10% on the last $35,000 = $3,500
• Total commission = $9,500

The calculator above is flat rate, so to check a tiered month you work out the blended rate first: $9,500 ÷ $135,000 = 7.04%. Put 135000 and 7.04 into the boxes and you get $9,504, which is $4 off only because the blended rate rounds at two decimals. That blended figure is also the number worth watching month to month. It is what you are really being paid per dollar sold, and it moves every time your volume crosses a tier.

If a $5,000 draw was advanced at the start of the month:

Net paycheck = $9,500 − $5,000 = $4,500, because the draw was already paid to you.