Commission Calculator

How to use the commission calculator

1. Choose what to calculate. Pick a flat-rate commission, a tiered commission, the rate you were paid, or the sales you need to reach a target.
2. Enter the sales amount. Use the total sales, revenue or sale price the commission is based on.
3. Enter the rate or the tiers. For a tiered plan, set where tier 1 and tier 2 end and the rate for each tier. Anything above tier 2 is paid at the tier 3 rate.
4. Add a base salary (optional). Enter your salary for the same period, such as a month, to see your total pay.
5. Set your share for split commissions. Open the advanced options if you keep only part of the commission, for example after a brokerage split.

The results show the commission, your share, the effective rate for tiered plans, total pay, and a summary in plain words. Commissions are usually taxed as ordinary income, so the amount you take home will be lower.

How to calculate commission

A commission is a share of the sale paid to the person who made it. For a flat commission rate, multiply the sales amount by the rate:

Commission = Sales amount × Commission rate

Example: $50,000 in sales at a 5% commission rate pays 50,000 × 0.05 = $2,500.

Finding the commission rate

If you know what you were paid, divide the commission by the sales and multiply by 100:

Commission rate = (Commission ÷ Sales) × 100

Example: $1,200 of commission on $30,000 of sales is 1,200 ÷ 30,000 × 100 = 4%.

Sales needed for a target

To plan how much you need to sell, divide your commission goal by the rate:

Sales needed = Target commission ÷ Commission rate

Example: to earn $3,000 at a 6% rate you need 3,000 ÷ 0.06 = $50,000 in sales.

Tiered (graduated) commission

In a tiered plan, each rate applies only to the sales inside its own band, and the amounts are added together. Take a plan that pays 5% on the first $1,000, 10% from $1,000 to $2,500 and 15% above $2,500. On $3,000 of sales:

• Tier 1: $1,000 × 5% = $50
• Tier 2: $1,500 × 10% = $150
• Tier 3: $500 × 15% = $75
• Total commission: $275, an effective rate of about 9.17%

Some plans instead pay the higher rate on every dollar once you pass a threshold. Check your compensation plan to see which method it uses.

Base salary and splits

With a base salary plus commission, total pay is simply the salary plus the commission for the same period. When a commission is split, as is common in real estate, multiply the commission by your share. A 5% commission on a $400,000 home is $20,000, and an agent who keeps 50% of that receives $10,000.