Commission Calculator
Calculate sales commissions with flat, tiered, and graduated structures. See potential earnings and compare commission scenarios.
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Commission Structure
Commission Tiers
$0 - $25,0003%
$25,000 - $50,0005%
$50,000 - $100,0007%
$100,000+10%
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Last updated: January 2026
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Frequently Asked Questions
How do tiered commission structures work?
Tiered commissions increase your rate as you sell more. For example: 5% on the first $10,000, 7% on $10,001-$25,000, and 10% above $25,000. With $30,000 in sales, you'd earn: $500 (5% × $10K) + $1,050 (7% × $15K) + $500 (10% × $5K) = $2,050 total. The effective rate (6.8%) is lower than the top tier because lower tiers still apply to initial sales. This structure incentivizes exceeding quotas.
What is a good commission rate for sales?
Commission rates vary widely by industry. Real estate agents typically earn 2.5-3% per side. SaaS sales reps earn 5-10% on new deals, often with accelerators above quota. Insurance agents earn 10-40% first-year premium. Retail sales averages 1-5%. High-margin products or services support higher rates. A 'good' rate depends on your base salary, quota difficulty, and total on-target earnings (OTE). Compare your OTE to market rates for your role and experience level.
What is the difference between flat rate and graduated commissions?
Flat rate pays the same percentage on all sales—simple but no extra incentive for overperformance. Graduated (or accelerated) commissions pay a higher rate after hitting a threshold. Example: 5% base rate, then 10% on sales above $50,000. If you sell $80,000: $2,500 (5% × $50K) + $3,000 (10% × $30K) = $5,500. Graduated structures reward top performers while controlling costs on baseline sales. Most enterprise sales roles use graduated commissions.
How do I calculate my effective commission rate?
Effective rate = Total commission earned ÷ Total sales × 100. With tiered or graduated plans, your effective rate is always between your lowest and highest tier. Example: On $100K sales with 5%/7%/10% tiers at $25K/$50K thresholds, you earn $7,750. Effective rate = $7,750 ÷ $100,000 = 7.75%. Track this metric monthly—it reveals whether you're consistently hitting higher tiers. Top performers often achieve 80-90% of the maximum possible rate.
Should I choose higher commission or higher base salary?
It depends on your risk tolerance and sales confidence. Higher base (60-70% of OTE) provides stability—better for newer reps, complex sales cycles, or economic uncertainty. Higher commission (50%+ variable) maximizes upside if you consistently exceed quota—common for experienced reps in transactional sales. Calculate break-even: at what sales level do both offers pay equally? Choose higher commission if you're confident you'll exceed that level. Also consider accelerators, caps, clawbacks, and quota reset timing.