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    Commission Calculator

    Calculate sales commission with flat or tiered rates. Add base salary, see effective commission rate and total earnings.

    Free to use. Runs in your browser.

    Enter your sales amount and commission rate to calculate earnings. Supports flat percentage or tiered commission structures.

    How Sales Commission Structures Work

    Commission is performance-based pay tied to sales results. The two main structures are flat rate (same percentage on all sales) and tiered (higher rates as you sell more). Most companies use tiered structures because they incentivise exceeding targets.

    With tiered commission, you earn more per pound as your sales increase. Sell £10,000 at 5%, and you earn £500. But the next £40,000 might earn 8% (£3,200), and everything above £50,000 earns 12%. The accelerators reward top performers disproportionately.

    Typical Commission Rates by Industry

    IndustryTypical RateStructureNotes
    Real estate1 to 3%Flat per saleOf property sale price
    SaaS / software8 to 15%Tiered, often with acceleratorsHigher for new business vs renewals
    Insurance5 to 15%Flat or tieredFirst-year premium; renewals lower
    Retail (in-store)1 to 5%Flat on upsellsOften on specific product categories only
    Recruitment15 to 25%Flat per placementOf candidate's first-year salary

    What this means for you: Commission rates vary enormously by industry, deal size, and whether you're selling to new or existing customers. Always clarify: is the rate on revenue, gross profit, or contract value? The base can change your effective earnings significantly.

    Flat vs Tiered: What You Actually Take Home

    These numbers show why tiered structures exist. Same £100,000 in sales, very different payouts depending on how the tiers are set:

    StructureHow It WorksCommission on £100K
    Flat 8%Same rate on everything£8,000
    Tiered (5/8/12%)5% on first £20K, 8% on next £30K, 12% above £50K£9,400
    Accelerated (5/10/15%)5% to quota, 10% to 150%, 15% above£10,500
    Decelerating12% first £30K, 8% next £30K, 5% above£8,000

    Accelerating structures reward overperformance, the more you sell past quota, the more each deal is worth. Decelerating structures cap your upside and are less common. If you're negotiating a comp plan, push for accelerators above quota.

    Negotiating Your Commission Plan

    Do

    Ask about OTE attainment. On-Target Earnings sound great on paper, but what percentage of the team actually hits quota? If only 20% reach OTE, the "expected" earnings are unrealistic.

    Do

    Negotiate the accelerators, not just the base rate. A 2% higher accelerator above quota pays off massively if you're a strong performer, and costs the company nothing if you don't hit it.

    Avoid

    Uncapped commission with clawbacks. "Uncapped" sounds great until you discover that cancelled deals or refunds claw back your commission months later. Understand the clawback window before signing.

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    How to use this tool

    1

    Enter your total sales amount

    2

    Choose flat or tiered commission mode

    3

    Set your commission rate(s)

    Common uses

    • Calculating expected earnings from sales targets
    • Comparing flat vs tiered commission structures
    • Modelling income at different sales levels
    • Understanding effective commission rates across tiers
    • Planning total compensation with base salary plus commission

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    Frequently Asked Questions

    What is a tiered commission?
    A tiered structure pays different rates at different sales thresholds. For example: 5% on the first $10,000, 8% on $10,001-$50,000, and 12% above $50,000. Each tier only applies to the sales within that bracket, not your entire sales total.
    What is the effective commission rate?
    Your total commission divided by total sales, expressed as a percentage. With tiered structures, the effective rate starts low and increases as you sell more. It's useful for quickly comparing different commission plans.
    Can I add a base salary?
    Yes, enter your base salary and the calculator shows your total compensation (base + commission). This helps you understand how much of your income depends on sales performance.
    Does order matter in tiered commission?
    Yes, tiers are applied sequentially from lowest to highest. Sales fill each tier before moving to the next. $75,000 in sales fills the first tier ($10k at 5%), then the second ($40k at 8%), then the remainder ($25k at 12%).
    What's a typical commission structure?
    It varies hugely by industry. Real estate: 1-3% of sale price. SaaS: 8-15% of contract value. Recruitment: 15-25% of candidate's salary. Retail: 1-5% on upsells. The base salary to commission ratio also varies, 50/50 is common in SaaS.
    What are commission accelerators?
    Accelerators increase your commission rate after you hit quota. If your standard rate is 10% and the accelerator is 1.5x above quota, you earn 15% on every pound sold beyond your target. They're designed to motivate overperformance.
    Should I compare commission plans on effective rate?
    Yes, it's the best single number for comparison. A plan with 5%/8%/12% tiers might give you an effective rate of 8.5% at $75k sales. Another plan with a flat 9% gives you 9% at any level. The flat rate is simpler but the tiered plan rewards higher sales.
    What about commission clawbacks?
    Some companies claw back commission if a customer cancels within a set period (typically 3-12 months). This is common in SaaS and insurance. Factor this risk into your expected earnings, especially if your industry has high churn.
    Is commission taxed differently from salary?
    No, commission is taxed as regular income. However, it may be taxed at a higher marginal rate if it pushes you into a higher tax bracket. In the UK, commission is subject to Income Tax and National Insurance just like your base salary.
    What's OTE (On-Target Earnings)?
    OTE is base salary plus expected commission if you hit 100% of your sales target. A role with £40k base and £80k OTE means you'd earn £40k in commission at quota. OTE is not guaranteed, it's what you'd earn at target performance.
    How do I calculate commission on gross profit vs revenue?
    Some plans pay commission on revenue (total sales), others on gross profit (revenue minus cost of goods). Commission on profit is typically a higher percentage but a lower absolute amount. Clarify which base your plan uses before calculating.
    What's a draw against commission?
    A draw is an advance on future commission. Recoverable draws must be paid back if you don't earn enough commission. Non-recoverable draws are guaranteed minimum payments. Draws are common for new sales reps still building their pipeline.

    Results are for general informational purposes only and should be checked before use. They are not professional advice. See our Disclaimer and Terms of Service.