Commission Calculator
Calculate sales commission for flat-rate, marginal or whole-amount tiered plans and draws, add base salary, and find the sales needed to hit your target.
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About this toolWhat is the Commission Calculator?
Sales compensation plans come in a few common shapes, and the arithmetic behind each one is easy to get wrong in a spreadsheet. This commission calculator handles a flat percentage of sales, tiered plans where the rate rises with volume, base salary plus commission, and a draw against commission paid across several periods. It also answers the reverse question: how much do I need to sell to earn a given income, or what rate would get me there?
Tiered plans are where people disagree most, because the same tier table can be read two ways. In a marginal (graduated) plan each slice of sales earns its own rate, like income tax brackets. In a whole-amount plan, sometimes called retroactive, the rate of the highest tier you reach applies to every dollar. The calculator shows both side by side so a rep and a manager can check they mean the same thing.
The inputs are kept in the link for sharing, and all calculations run locally in your browser.
- Flat, tiered and draw-against-commission plans
- Marginal and whole-amount (retroactive) tier comparison
- Base salary plus commission
- Recoverable and non-recoverable draw schedule
- Sales or rate needed to reach a target income
How to use the Commission Calculator
- Choose the plan type: Flat rate, Tiered or Draw.
- For a flat plan, enter sales, the commission rate and any base salary for the period.
- For a tiered plan, set the upper limit and rate of each tier (the last tier is open-ended) and choose marginal or whole-amount.
- For a draw, enter the draw per period, the commission rate and the sales for each period, and choose recoverable or not.
- Optionally enter a target income to see the sales needed on your plan, or the flat rate needed at your current sales.
Worked examples
Flat rate
Input
Sales 25,000 at 6%
Output
Commission 1,500.00
The simplest plan. With a 3,000 base the total pay would be 4,500.
Marginal against whole-amount tiers
Input
Sales 25,000; tiers 5% to 10,000, 7% to 20,000, 10% above
Output
Marginal 1,700.00 (6.8% effective); whole-amount 2,500.00
Same table, 800 apart. The comparison table shows the jump at each threshold under whole-amount rules.
Recoverable draw over four months
Input
Draw 2,000; 6%; sales 15,000, 40,000, 30,000, 55,000
Output
Paid 2,000, 2,000, 2,000, 2,400; total 8,400.00, equal to commission earned
Months one to three fall short and roll a balance forward. Month four repays the last 900 before anything extra is paid.
Sales needed for a target
Input
Same tiers (marginal), target income 3,000, no base
Output
Sales needed 38,000.00
The first two tiers give 1,200; the remaining 1,800 at 10% needs another 18,000 above 20,000.
Background and insight
A flat plan is commission = sales x rate. A base-plus-commission plan adds a fixed salary for the period. In a marginal tiered plan with 5% up to 10,000, 7% from 10,000 to 20,000 and 10% above that, sales of 25,000 earn 500 + 700 + 500 = 1,700, an effective rate of 6.8%. Under whole-amount tiers the same sales earn 10% of 25,000 = 2,500.
Whole-amount tiers create cliffs. Sales of exactly 10,000 earn 500, but 10,001 earns 700.07 because the 7% rate now applies to everything. Reps learn to time deals around those thresholds, which is why many plan designers prefer marginal tiers or accelerators that apply only above quota.
A draw is an advance paid each period whatever the sales. With a recoverable draw, any period where commission falls short of the draw creates a balance that is repaid out of later commission. A non-recoverable draw is a guaranteed minimum: the shortfall is forgiven. What happens to an unpaid balance when someone leaves depends on the written plan and on local wage law, so read the plan document rather than relying on a calculator.
Common use cases
Checking a paycheck
Reps can confirm the commission line on a pay slip, including which tiers were applied.
Comparing job offers
Put two plans through the same sales figures to see which pays more at realistic, not best-case, volumes.
Designing a sales plan
Managers can test tier thresholds and rates against expected sales and see the cliffs a whole-amount plan creates.
Planning for a ramp period
Model a draw for a new hire's first quarters and see how much is likely to be owed back.
Tips and limitations
- Check whether your plan pays on revenue, gross profit or collected cash. Enter that figure as "sales".
- Effective rate (commission divided by sales) is the fairest single number to compare tiered plans.
- A capped plan with no open-ended top tier pays nothing above the cap, and the target finder will say the target is unreachable.
- Commission is usually taxed as ordinary income and, in the US, often withheld at the supplemental wage rate. These results are before tax.
- Clawbacks for refunds and cancelled deals are not modelled. Subtract returned sales yourself.
Frequently asked questions
How do you calculate sales commission?
Multiply the sales figure the plan pays on by the commission rate. 25,000 of sales at 6% earns 1,500. If you also get a base salary, add it for total pay. Tiered plans apply different rates to different amounts, which the tiered mode handles.
What is the difference between marginal and retroactive tiered commission?
In a marginal plan each slice of sales earns its own tier's rate, so moving into a higher tier only raises the rate on the extra sales. In a retroactive (whole-amount) plan, reaching a higher tier applies that rate to all sales in the period, so the commission jumps at each threshold.
What does draw against commission mean?
It is an advance paid every period regardless of sales. If commission earned is higher than the draw, you receive the difference. If it is lower, a recoverable draw carries the shortfall forward to be repaid from future commission, while a non-recoverable draw forgives it.
Do I have to pay back a commission draw if I quit?
It depends on the written plan and on the law where you work. Some plans ask for repayment of a recoverable balance, others only offset it against future commission, and some jurisdictions restrict deductions from wages. Read your agreement and ask HR or an employment adviser.
What commission rate do I need to reach my income goal?
Subtract your base salary from the target income and divide by expected sales. With a 40,000 base, an 80,000 goal and 800,000 in sales, you need 40,000 / 800,000 = 5%. Enter a target income in the calculator to get this and the sales needed on your current plan.
What is a typical sales commission rate?
It varies widely by industry and by how much base salary is paid. Plans with a large base often pay a few percent of revenue, while commission-only roles and high-margin products pay much more. Compare offers by total expected pay at realistic sales, not by the headline rate.
Is there an in-depth guide to the Commission Calculator?
Yes. “Margin, Markup and Break-Even: The Arithmetic of Pricing” covers the background, how it works, common pitfalls and worked examples. Read the full guide.
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