Commission Calculator — Commission on a Sale & Rate
Commission on any sale at any rate — what you earn, what you keep, and the rate that a given payout implies.
Commission on a sale
Rate implied by a payout
What commission-based pay involves
Commission ties what someone earns directly to what they sell, which is why it shows up everywhere from estate agency and car sales to affiliate marketing and payment processing. The arithmetic is simple — a percentage of a sale — but the questions around it are not: how much did I actually earn, how much of the sale do I keep, and what rate was I really paid? This page answers all three.
The two calculations
| Question | Method | Example |
|---|---|---|
| Commission earned | sale × rate ÷ 100 | £2,000 × 5% = £100 |
| Amount kept | sale − commission | £2,000 − £100 = £1,900 |
| Rate from a payout | commission ÷ sale × 100 | £100 ÷ £2,000 = 5% |
Revenue base vs profit base
The single most common surprise with commission is the base. "5% commission" sounds the same whether it is 5% of the sale price or 5% of the gross profit, but on a £2,000 sale with £500 of profit the first pays £100 and the second pays £25. Before you rely on a rate, confirm whether it is applied to revenue, gross profit or net profit — the headline number hides the difference.
When a higher rate is not better
Two deals with different rates are only comparable once you weigh them by what they sell. A 10% commission on a product that rarely sells can earn less than a 4% commission on one that moves every day. The rate matters, but so does the volume behind it — which is why the calculator, like the pricing pages it sits beside, is a starting point for the decision rather than the decision itself.
Worked examples
| Sale | Rate | Commission | Seller keeps |
|---|---|---|---|
| 2,000 | 5% | 100.00 | 1,900.00 |
| 12,000 | 7% | 840.00 | 11,160.00 |
| 8,000 | 7.5% | 600.00 | 7,400.00 |
| 15,000 | 5% to 10,000, then 8% | 900.00 | 14,100.00 |
The last row is marginal, not flat: the first 10,000 earns 5% and only the remaining 5,000 earns 8%. That gives a blended rate of 6%, which is the number to compare with a flat quote.
The reverse calculation is just as useful in practice. If a statement says £600 was paid on an £8,000 sale, the implied rate is 600 ÷ 8,000 × 100 = 7.5%. Doing that for a month of payouts is the fastest way to catch a rate that was applied to the wrong base, or a tier that was not credited.
What “sale value” should mean
Commission is a percentage of something, and the disputes are almost always about that something. The defensible base is normally the net revenue the seller actually books: the selling price after discounts, excluding sales tax or VAT, and usually excluding shipping and handling. If the customer pays £1,200 including £200 of tax, a 5% commission on £1,200 pays £60 while the same rate on £1,000 of revenue pays £50 — a 20% difference created entirely by the definition.
Returns, credits and chargebacks usually reduce the base retroactively. A month that looks strong on invoices can pay less once refunds land, and some agreements only reconcile that at quarter end. When you quote an expected commission, state whether it is before or after returns; otherwise the number is optimistic by construction.
Rates, tiers and the shape of the deal
A single rate is the simplest structure and the easiest to verify, but many sales roles use thresholds, accelerators or a quota. The questions that decide what you actually earn are: is the rate marginal or retroactive, does the accelerator apply from the first unit once the quota is hit, and is there a floor (a draw) or a cap? Each changes the arithmetic without changing the headline percentage, which is why a commission calculator alone cannot tell you whether an offer is good — it tells you what a given structure pays.
For comparing two offers, model a realistic month at three volumes: a bad month, a typical month and a good month. The ranking often flips between them, because a high rate with a high threshold pays nothing in the bad month and a lower flat rate pays something every month. That comparison is the decision; the calculator is the arithmetic inside it.
Frequently asked questions
How do I calculate commission?
Multiply the sale value by the commission rate and divide by 100. A 5% commission on a £2,000 sale is 2000 × 5 ÷ 100 = £100. The calculator also shows the amount you keep after commission.
How do I work out the commission rate from a payout?
Divide the commission received by the sale value and multiply by 100. A £100 commission on a £2,000 sale is 100 ÷ 2000 × 100 = 5%. That is useful when you know what you were paid but not the rate that was applied.
What is a typical commission rate?
It varies far too much to give one answer — real-estate agents often charge 5–6% of the sale price, sales reps commonly earn 1–10% of revenue, affiliate programmes range from under 1% to over 50%, and payment processors charge a fraction of a percent. What is ordinary in one industry is unusual in another, so use your own contract as the reference.
Is commission calculated on the sale price or the profit?
Usually the sale price (revenue), but not always — some arrangements pay a percentage of gross profit instead, which is a much smaller base for the same headline rate. Always check which basis your agreement uses before assuming the number.
How do I add up commission on several sales?
Run each sale through the calculator and add the results, or add the sales first if the rate is the same for all of them — commission on a total, at one rate, is the same as the sum of commissions on the parts. With tiered rates you cannot add first: each band applies to a different slice of the total, so calculate band by band.
How do tiered or graduated commissions work?
The rate changes at thresholds, and the important question is whether the higher rate applies to the whole sale or only to the part above the threshold. The usual arrangement is marginal: the first £10,000 at 5% and the portion above it at 8%. A £15,000 sale then pays £500 + £400 = £900, a blended 6% — not £1,200, which is what applying 8% to the whole sale would give.
What happens if the customer returns the item?
Most agreements claw the commission back or offset it against future payouts, because the sale did not ultimately happen. If the return happens after a payout, expect a negative adjustment on a later statement. When quoting a commission figure, say whether it is gross of returns; a month with returns can pay less than the same month's invoices suggest.
Is commission calculated before or after tax?
Almost always before sales tax or VAT — the tax is collected on behalf of the state and is not revenue to the seller. Commission is normally a percentage of the net sale value after discounts, excluding tax and often excluding shipping. Check the contract wording: “gross sales” and “net sales” can differ by the tax, the discount and the freight.
What is a draw against commission?
A draw is money advanced against commission you have not earned yet. It is recoverable or non-recoverable depending on the agreement: with a recoverable draw, future commissions pay it back first, so a bad month carries debt; with a non-recoverable draw, the employer absorbs the shortfall. The headline rate looks the same either way, but the risk is completely different.
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Longer explanations of the problems this tool solves:
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