Calculate sales commission at a flat or tiered rate, total pay with base salary, the effective rate, and the sales needed to earn a target commission.
$50,000.00 of sales earns $2,500.00 of commission, an effective 5%, and total pay with the $3,000.00 base is $5,500.00.
Commission is sales × rate. With tiers, a marginal plan pays each rate only on the sales inside its tier, like tax brackets; a whole-amount plan pays the rate of the highest tier reached on every dollar. Base salary is added to get total pay, and commission ÷ sales gives the effective rate. Working backwards, the calculator finds the sales needed for a target commission, or the flat rate implied by a sale and its commission.
With the defaults, $50,000 of sales at a flat 5% earns $2,500 of commission, and a $3,000 base brings pay to $5,500. Under the example tiers of 3% to $25,000, 5% to $75,000 and 7.5% above, $100,000 of sales earns $5,125 on a marginal plan and $7,500 on a whole-amount plan.
Enter one tier per line as the sales amount where it starts and its rate. Returns, draws against commission and caps are not modelled.
Checked against: Hand calculation: 50,000 × 0.05 = 2,500; 2,500 + 3,000 = 5,500; 2,500 ÷ 5,500 = 45.45%
Checked against: Hand calculation: 3% × 25,000 + 5% × 50,000 + 7.5% × 25,000 = 750 + 2,500 + 1,875
Checked against: Hand calculation: the 7.5% tier is reached, so 7.5% × 100,000
Checked against: Python fractions: 750 + 2,500 = 3,250 by 75,000; 75,000 + 1,750 ÷ 0.075 = 98,333.33
Multiply the sale by the commission rate written as a decimal. A 5% commission on a $50,000 sale is 50,000 × 0.05 = $2,500. With a base salary of $3,000 for the same period, total pay is $5,500. To find the rate from a paid commission, divide commission by sales: $1,800 on $40,000 is 4.5%.
On a marginal (graduated) plan each rate applies only to the sales within its band. With 3% up to $25,000, 5% from $25,000 to $75,000 and 7.5% above, $100,000 of sales pays 750 + 2,500 + 1,875 = $5,125, an effective 5.125%. On a whole-amount plan the 7.5% tier reached applies to all $100,000, paying $7,500. Check which method your plan uses.
Divide the target by the rate on a flat plan: $5,000 at 5% needs $100,000 of sales. On the marginal tiers above, the first two tiers pay $3,250 by $75,000 of sales, and the remaining $1,750 at 7.5% takes $23,333.33 more, so $98,333.33 in total. On the whole-amount version, $75,000 of sales already pays $5,625.
There is no set rate: commissions are negotiable between the client and the brokerage. Under the National Association of Realtors settlement, in force since 17 August 2024, offers of compensation can no longer appear on the multiple listing service, and agents working with a buyer need a written agreement before touring a home. Whatever rate is agreed, commission = sale price × rate, split between the brokerages as they agree.
Usually yes. A retail or service employee is exempt from overtime under section 7(i) of the Fair Labor Standards Act only if the regular rate exceeds 1.5 times the minimum wage in overtime weeks and more than half of total earnings over a representative period are commissions (DOL Fact Sheet #20). With a $3,000 base and $2,500 of commission, commission is 45.5% of pay, so the exemption does not apply.
Accuracy depends on your inputs and the method's assumptions. Decimal arithmetic uses 50 significant digits, but estimates, numerical methods and source data can be less precise; the displayed rounding does not remove those limits. It is checked against 8 worked examples whose answers come from independent sources; for example, “5% of $50,000 with a $3,000 base” is checked against Hand calculation: 50,000 × 0.05 = 2,500; 2,500 + 3,000 = 5,500; 2,500 ÷ 5,500 = 45.45%.
U.S. Department of Labor, Fact Sheet #20: Employees paid commissions by retail establishments who are exempt under section 7(i) from overtime; National Association of Realtors: Settlement FAQs (practice changes effective 17 August 2024).
For planning only. Lenders, tax authorities and markets apply their own rounding, fees and rules; confirm figures with them before you commit.
8 worked examples with independently sourced answers ship with this calculator. They run in the test suite; you can run them here too.
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