Commission Calculator
Calculate sales commission amounts and determine net revenue for sellers or total cost for buyers
Calculate Sales Commission
The total value of the sale or transaction
Commission rate as a percentage of sale price
Example Calculation
Sales Scenario
Product: Blue Widget
Sale Price: $70.00
Commission Rate: 14%
Commission Paid By: Seller
Step-by-Step Calculation
1. Commission Amount = $70.00 × 14% = $9.80
2. Seller's Net Revenue = $70.00 - $9.80 = $60.20
3. Salesperson receives $9.80 commission
Common Commission Rates
Manufactured Goods
7% - 15%
Electronics, appliances, retail products
Real Estate
5% - 7%
Residential and commercial properties
Services
20% - 50%
Consulting, software, professional services
Insurance
10% - 20%
Life, auto, health insurance policies
Commission Tips
Higher commission rates motivate salespeople but reduce profit margins
Consider tiered commission structures for better performance incentives
Factor commission costs into your pricing strategy
Document commission terms clearly in agreements
Understanding Sales Commissions
What is a Sales Commission?
A sales commission is a percentage-based payment made to salespeople or agents for successfully completing a sale. It serves as an incentive for sales professionals and aligns their interests with the company's revenue goals.
Types of Commission Structures
- •Straight Commission: 100% commission-based pay
- •Base + Commission: Fixed salary plus commission
- •Tiered Commission: Higher rates for higher sales volumes
- •Flat Rate: Fixed amount per sale regardless of value
Commission Calculation Formula
Commission = Sale Price × Commission Rate ÷ 100
For example: $1,000 × 5% = $50 commission
Who Pays the Commission?
Seller Pays: Commission is deducted from the seller's revenue. This is the most common arrangement.
Buyer Pays: Commission is added to the purchase price. Less common but sometimes used in real estate or broker transactions.