Ways to calculate commission
Flat rate
Sales × rate. 85,000 in sales at 3% = 2,550.
Tiers
Graduated: each slice at its tier’s rate (first 50,000 at 2%, the next up to 100,000 at 4%...). Whole amount: the reached tier’s rate applies to all sales.
Target bonus
A base rate on all sales, a fixed bonus once the target is reached, and an optional extra rate on sales above it.
Example: 85,000 in tiers
Tiers: up to 50,000 at 2%, up to 100,000 at 4%, above at 6%.
| Method | Working | Commission |
|---|---|---|
| Graduated | 50,000 × 2% + 35,000 × 4% | 2,400 |
| Whole amount | 85,000 × 4% | 3,400 |
FAQ
How do I calculate sales commission?
Multiply sales by the commission rate. Example: 40,000 in sales at 5% = 2,000. For tiers, use the “Tiers” tab.
Graduated vs whole-amount tiers?
Graduated: each tier’s rate applies only to the slice inside it. Whole amount: the highest tier reached applies to all sales, so pay jumps at each tier limit.
Sales exactly on a tier limit: which tier?
The tier whose limit it is (“up to 50,000” includes 50,000). If your plan says otherwise, adjust the limits.
Is commission on sales before VAT?
Usually yes, as VAT isn’t the business’s income. Enter sales the way your plan defines them.
What is the effective commission rate?
Commission ÷ sales. Handy for comparing different plans on the same sales.