Commission Calculator
Commission Calculator
Base Pay & Draw
Based on your results — what to do next:
How much of this commission check will you keep?
A $4,000 commission withheld at the flat 22% supplemental rate loses about $880 to federal withholding alone.
Can the business afford this commission rate?
Paying 8.0% of revenue in commission comes straight out of gross margin — check the deal still clears your target margin.
What does this income qualify you for?
Lenders usually average 2 years of commission income. At $84,000/yr, see the home price that supports.
A commission calculator works out how much a salesperson earns on a given amount of sales. Enter your sales and either a single flat rate or a tiered schedule. The tool returns the commission, your effective rate, and total pay once base salary and any draw against commission are included. Use the side-by-side mode to compare two comp plans.
How Commission Is Calculated
① Flat-rate commission
Commission = Sales × Rate
$50,000 × 8% = $4,000
② Marginal tiered commission
Commission = Σ (Sales within tierk × Ratek)
Each rate applies only to the sales inside its band, the same way tax brackets work.
③ Effective rate and total pay
Effective Rate = Commission ÷ Sales | Pay = Base + max(Commission, Draw)
| Variable | Meaning | Typical Range |
|---|---|---|
| Sales | Revenue credited to you this period | Varies |
| Rate | Commission percentage | 2–5% retail/auto; 5–15% B2B; 20–30% SaaS new ARR |
| Base | Guaranteed salary per period | 50–70% of target pay |
| Draw | Advance against future commission | Common in 100%-commission roles |
Worked Example — $50,000 in monthly sales, $3,000 base
- Flat 8%: $50,000 × 0.08 = $4,000 → pay $7,000/mo, $84,000/yr
- Tiered (5% to $25k, 8% to $75k, 12% above): $1,250 + $2,000 = $3,250
- Tiered effective rate: $3,250 ÷ $50,000 = 6.5%
- At $100,000 in sales the tiered plan pays $1,250 + $4,000 + $3,000 = $8,250 (8.25%) — ahead of flat 8%
💡 Pro-Tip
Find the crossover point before you sign. A tiered plan with a higher top rate usually pays less than a flat plan at average performance and more only above a certain volume. Enter the flat plan as Scenario A and the tiered plan as Scenario B, then raise sales until tiered pulls ahead. If that number is above what you have realistically sold in the past year, the flat plan pays you more.
Commission Calculator FAQ
How do you calculate commission?
Multiply the sale amount by the commission rate as a decimal. An 8% commission on $50,000 is $50,000 × 0.08 = $4,000.
How does tiered commission work?
In a marginal plan, each rate applies only to sales in its band. With 5% up to $25,000 and 8% from $25,000–$75,000, $50,000 of sales earns $1,250 + $2,000 = $3,250. Some companies use a "retroactive" plan where hitting a tier re-rates all sales; ask which one your plan uses.
What is a draw against commission?
A draw is a guaranteed advance paid each period. If your commission beats the draw you get the difference; if it falls short, a recoverable draw carries the shortfall forward and deducts it from future commission. A non-recoverable draw is forgiven.
How is commission taxed?
Commission counts as supplemental wages. Paid separately, it can be withheld at a flat 22% federal rate (37% on supplemental pay over $1 million), plus 7.65% FICA and any state tax. Your true tax is settled when you file.
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