How to calculate commission
Commission is the sale amount times the rate, and total pay adds any base salary:
Commission = Sale × Rate • Total = Base + Commission
A $50,000 sale at 5% earns $2,500 in commission. With a $2,000 base, total earnings are $4,500, and the effective rate on the sale (total ÷ sale) is 9%.
Common pay structures
- Commission only: all pay comes from sales — high upside, no floor.
- Base plus commission: a guaranteed salary plus a sales percentage.
- Tiered: the rate rises after you pass a quota — calculate each band separately.
Frequently asked questions
How do you calculate commission?
Multiply the sale amount by the commission rate as a decimal. A $50,000 sale at a 5% commission earns $50,000 × 0.05 = $2,500. Add any base salary to get your total earnings for the period.
What is a commission rate?
A commission rate is the percentage of a sale you earn as pay. Rates vary widely by industry — real estate is often around 5–6%, retail might be 1–10%, and some software sales pay 10% or more. Higher rates often come with lower base pay.
What is the difference between commission and total pay?
Commission is only the variable portion you earn from sales. Total pay also includes any fixed base salary. A rep with a $2,000 base and $2,500 in commission earns $4,500 total for the period.
What is a base-plus-commission structure?
It pays a guaranteed base salary plus commission on sales. This gives steadier income than commission-only while still rewarding performance. Enter your base pay in the calculator to see total earnings alongside the commission alone.
How is tiered commission different?
Tiered commission pays a higher rate once you pass certain sales thresholds — for example 5% up to a quota and 8% beyond it. This calculator uses a single flat rate; for tiers, calculate each band separately and add the results.
Disclaimer: Figures are gross, before taxes and deductions, and use a single flat commission rate. Provided for educational purposes only.