Commission Calculator

Whether you earn a flat percentage or a tiered plan that pays more as you sell more, this free commission calculator does the math for you. Enter your sales amount and rate for a straight plan — or switch to tiered mode with up to 3 rate bands — and see your commission per tier, total payout, and effective commission rate, recalculated instantly as you type.

How to Use the Commission Calculator

Start by choosing your plan type at the top of the calculator:

1. Straight rate: enter your total sales for the period and your commission rate. One multiplication, done — the classic plan for retail, real estate, and straightforward sales roles.
2. Tiered rates: enter the cap and rate for Tier 1 and Tier 2 (caps must increase), plus the Tier 3 rate that applies to everything above Tier 2. The calculator shows running totals per tier so you can see exactly where each dollar of commission comes from.
3. Read the result: total commission up top, a per-tier breakdown table below, and your effective commission rate — total commission divided by total sales — so you can compare plans apples to apples.

Everything recalculates instantly as you type, which makes this handy for "what-if" games: bump the sales figure to see what crossing into the next tier is worth, or compare a 7% straight plan against a 5/8/10 tiered plan to see which pays you more at your typical sales level.

Straight vs Tiered vs Draw Against Commission

Sales pay plans come in three main flavors, and it pays — literally — to know which one you are on. A straight commission plan applies one flat rate to all your sales: 7% of $25,000 is $1,750, whether it is your first sale or your fiftieth. It is simple, transparent, and common in retail, auto sales, and real estate. The downside: it rewards a $500 sale and a $50,000 sale at the same rate, which gives top performers little reason to chase whales.

A tiered (graduated) commission plan fixes that by paying higher rates as sales climb — 5% on the first $10,000, 8% on sales above it, and so on. Each rate applies only to the sales inside its own band, exactly like income tax brackets. Tiers push sellers to keep going after they would otherwise coast, which is why SaaS and B2B companies love them.

Draw against commission is not a rate structure but a payment mechanism, often paired with either plan. The company advances you a set amount each pay period — your "draw" — while you build a pipeline, then subtracts it from the commissions you earn. With a recoverable draw, any shortfall carries forward: if your $3,000 draw exceeds your $2,000 commission, you start next month $1,000 in the hole. With a non-recoverable draw, the company eats the difference and the draw acts as a guaranteed minimum. New hires should always ask which kind they are getting — it is one of the most expensive details in any offer letter.

Worked Example

A furniture salesperson closes $25,000 in a month on a tiered plan: 5% on the first $10,000 and 8% on everything above it. How much commission did she earn?

Notice the trap the tiered math avoids: the 8% rate applies only to the $15,000 above the first tier, not to the whole $25,000. Applying 8% to everything would wrongly give $2,000. Bands work like tax brackets — each rate touches only its own slice. Her effective rate of 6.8% sits between the two tier rates, which is always true for tiered plans, and it is the number to use when comparing this plan against a flat-rate offer.

Working Backwards: How Much Do You Need to Sell?

Targets are usually set as a commission dollar figure — "I want to earn $2,000 this month" — but you sell in dollars of revenue, so run the formula in reverse. On a straight plan it is a single division:

To earn $2,000 at a straight 8%, you need $2,000 ÷ 0.08 = $25,000 in sales. On a tiered plan, fill the bands from the bottom: if tier 1 pays 5% on the first $10,000, that band can contribute at most $500 toward the target. The remaining $1,500 must be earned in tier 2 at 8%, which takes $1,500 ÷ 0.08 = $18,750 of additional sales — $28,750 in total. Check your answer by entering that sales figure in the calculator above: it should return your target commission to the cent.

Limitations

This calculator works with gross commission before taxes and deductions — your actual paycheck will be lower after withholding. It does not model draws (recoverable or not), quota accelerators or decelerators, clawbacks on canceled orders, splits between team members, or caps on total payout, all of which appear in real-world plans. Commission is usually paid on collected revenue, not booked orders, so timing differences can shift which period a sale lands in. Rates and tiers here are the ones you enter — always verify them against your written compensation plan, because verbal promises about commission have a way of evaporating at payout time. Get the plan in writing, keep your own sales records, and reconcile every commission statement.

Commission and overtime are the two variable lines on a payslip, and both are formula-driven. The overtime pay guide covers the other one — the 1.5× rule, salaried-vs-hourly edge cases and the averaging mistake to avoid.

Frequently Asked Questions

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