Sales commission calculator
Get your commission in seconds, then model the real plan: base + commission, tiered rates or a quota with OTE, accelerators, cliff and cap. Free, no sign-up, nothing leaves your browser.
Made by Anatolii Ulitovskyi 
Fact-checked by RH Fardin Updated Grow the number, not just the math
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The formula
How to calculate sales commission
Every plan starts with one multiplication. The differences are in what you multiply and when the rate changes.
Turn the rate into a decimal first: 10% is 0.10, 7.5% is 0.075. The same formula works backwards. To find the rate, divide commission by sales. To find the sales you need for a target, divide the target commission by the rate.
$50,000 at 10%
50,000 × 0.10 = $5,000
The rep earns the same rate on every dollar sold.
$4,000 base, $60,000 at 5%
4,000 + 60,000 × 0.05 = $7,000
Commission is $3,000, which is 43% of the month's pay.
$6,000 target at 8%
6,000 ÷ 0.08 = $75,000
The sales a rep has to close to earn that commission.
Plan types
Commission structures compared
Pick the tab in the calculator that matches your plan. Here is how each one pays.
| Structure | How it pays | Common for | Example |
|---|---|---|---|
| Straight commission | One rate on all sales, no salary | Field sales, agents, affiliates | 20% of every sale |
| Base + commission | Fixed salary plus a rate on sales | Retail, inside sales, account managers | $4,000/month + 5% |
| Tiered commission | The rate rises as sales cross thresholds | Teams that reward volume | 5% to $10k, 7.5% to $25k, 10% above |
| Quota + OTE | Target commission paid in proportion to quota attainment | B2B and SaaS account executives | $120k OTE, 50/50, $600k quota |
| Accelerators | A higher multiplier on sales above quota | Plans that reward over-performance | 1.5× above 100%, 2× above 150% |
| Gross-margin commission | Rate applied to profit, not revenue | Distribution, agencies, car sales | 25% of gross profit |
| Draw against commission | An advance paid now, recovered from later commission | New reps during ramp-up | $2,000/month recoverable draw |
The detail most calculators skip
Tiered commission: marginal vs retroactive
Two plans can share the same tier table and still pay very different amounts. Check which one your plan document describes.
Take three tiers: 5% up to $10,000, 7.5% from $10,000 to $25,000 and 10% above $25,000. A rep sells $30,000.
Marginal tiers pay $2,125
10,000 × 5% + 15,000 × 7.5% + 5,000 × 10% = 500 + 1,125 + 500 = $2,125
Each rate applies only to the dollars inside its band, the way income tax brackets work. Pay grows smoothly and there are no jumps.
Retroactive (whole-amount) tiers pay $3,000
30,000 × 10% = $3,000
Once a threshold is crossed, the higher rate applies to every dollar. That pays more, but it creates a jump: at $25,000 the rep earns $1,875, and at $25,001 they earn $2,500. A single dollar is worth $625, which tempts reps to hold or split deals around the threshold.
The calculator shows both results side by side when you choose the Tiered tab.
Spreadsheets
Commission formulas for Excel and Google Sheets
Put the sales amount in cell A1. Use the Excel formula button in the calculator to get the formula for your exact plan.
Flat rate
Base + commission
Marginal tiers
Retroactive tiers
Commission rate from a known payout
B1 holds the commission. Format the cell as a percentage.
Benchmarks
Typical sales commission rates
Use these ranges to sanity-check a plan. They vary with industry, margins, deal size and whether a base salary is paid.
| Industry or role | Typical commission |
|---|---|
| SaaS and software | About 10–12% of annual contract value |
| Real estate | About 5–6% total, split between agents and brokers |
| Retail and wholesale | About 1–5% |
| Automotive | About 20–30% of the gross profit on the deal |
| Financial services | Mutual funds about 0.25–1%; annuities about 1–10% |
| Field and door-to-door sales | About 15–30%, often commission-only |
| Inside sales and account management | About 5–10% with a base salary |
Ranges compiled from the sources listed at the end of this page. Your own plan document always decides.
FAQ
Sales commission questions
How do you calculate sales commission?
Multiply the sales amount by the commission rate. $50,000 in sales at 10% pays $5,000. If the plan has a base salary, add it to the commission to get total pay.
How do I calculate my commission percentage?
Divide the commission by the sales amount and multiply by 100. A $3,000 commission on $40,000 in sales is a 7.5% rate.
How much do I need to sell to earn a target commission?
Divide the commission you want by your rate. To earn $6,000 at 8%, you need $75,000 in sales. Choose "Sales needed" in the Simple tab to do this for you.
What is a good commission rate?
Commission on the sale commonly runs 5–20%. Roles with a base salary sit lower, often 5–10%. Commission-only roles sit higher, often 15–30%. Compare against your industry in the table above.
Is commission calculated on gross or net sales?
It depends on the plan. Most plans pay on revenue, the price the customer pays. Some pay on gross profit (revenue minus cost of goods), which protects margins and discourages heavy discounting. The Simple tab can calculate both.
What is the difference between marginal and retroactive tiers?
Marginal tiers pay each rate only on the sales inside its band. Retroactive tiers pay the highest rate reached on all sales. On $30,000 with tiers of 5%, 7.5% and 10%, marginal pays $2,125 and retroactive pays $3,000.
What is OTE in sales?
On-target earnings is the total pay at exactly 100% of quota: base salary plus target commission. "$120,000 OTE, 50/50" means $60,000 base and $60,000 commission at quota. Model the full OTE, pay mix and paychecks with the OTE Calculator.
What is a commission accelerator?
A multiplier on the commission rate for sales above a threshold, usually 100% of quota. With a 1.5× accelerator, every dollar above quota earns one and a half times the normal rate.
What is a commission cliff?
A minimum attainment before any commission is paid. With a 50% cliff, a rep at 49% of quota earns no commission. Once they reach 50%, commission is paid from the first dollar.
How is commission taxed in the U.S.?
The IRS treats commissions as supplemental wages. Employers often withhold federal income tax at the flat supplemental rate of 22% on supplemental wages up to $1 million in a year. Withholding is not your final tax bill. See IRS Publication 15 or ask a tax professional.
Do commission plans have to be in writing?
In California, Labor Code section 2751 requires commission agreements to be in writing, describe how commissions are calculated and paid, and be signed by the employer with a copy given to the employee. Other states have their own rules.
References
Sources
- Average commission and pay mix: Salesforce, CaptivateIQ
- Rates by industry and the 60/40 split: Mailshake, QuotaPath
- Commission structures: SPOTIO
- Supplemental wage withholding: IRS Publication 15
- Written commission contracts: California Labor Code § 2751
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