Sales Commission Calculator

Calculate commission from sales with optional tiered rates.

By Konstantin Iakovlev · Updated September 2026 · Source: IRS — Publication 15 (Circular E), Employer's Tax Guide

$
%

Commission Earned

$10,000.00

Effective Rate

10.0%

Total Earnings

$10,000.00

Earnings Breakdown

Commission$10,000.00
Total Earnings$10,000.00

Use the Sales Commission Calculator above to calculate your results. Enter your values and see instant results — all calculations run in your browser.

Disclaimer: This calculator is for informational purposes only and does not constitute tax, financial, or legal advice. Results are estimates based on the information you provide and current rates. Always consult a qualified tax professional or financial advisor for advice specific to your situation.

How It Works

For salespeople and the businesses that employ them, knowing exactly how earnings track sales performance keeps compensation transparent and disputes rare, even when tiered structures complicate the math. Clear commission figures also make it easier to plan around months when pay swings with sales.

The calculator multiplies your sales by the commission rate. Under Advanced options you can add a second tier: sales up to the Tier 2 threshold earn the base rate, only the sales above it earn the Tier 2 rate, and the two parts are added. A base salary, if you enter one, is added on top to give total earnings.

Feed in sales figures that are net of returns and discounts, since gross numbers inflate the payout. Tiered rates are where people slip up most: in the usual arrangement, each rate applies only to the sales inside its own bracket rather than to the entire sales total. Reading the commission agreement closely is the surest way to confirm how the tiers are defined and applied.

Example: Two-Tier Commission on $120,000 of Sales

  1. 1 A salesperson closes $120,000 in sales. The plan pays 5% on sales up to $50,000 and 8% on everything above $50,000. Enter $120,000, a 5% rate, and under Advanced options a Tier 2 threshold of $50,000 at 8%.
  2. 2 First tier: $50,000 * 0.05 = $2,500. Second tier: ($120,000 - $50,000) * 0.08 = $70,000 * 0.08 = $5,600.
  3. 3 Total commission is $2,500 + $5,600 = $8,100, an effective rate of 6.75% on the $120,000.
  4. 4 Paying 8% on the whole $120,000 would have given $9,600, so reading whether a tier rate applies to all sales or only to the sales above the threshold is worth $1,500 here. Commission is supplemental wages: employers can withhold federal income tax on it at a flat 22% (IRS Publication 15).

Source: IRS — Publication 15 (Circular E), Employer's Tax Guide · Last updated: September 2026

Frequently Asked Questions

How do I calculate sales commission?
Multiply the sale amount by the commission rate. A $50,000 sale at 5% commission earns $2,500. For tiered commission, apply each rate to the portion of sales in that tier. For example, 5% on the first $50,000 and 8% on sales above $50,000.
What is a typical commission rate for sales?
Commission rates vary by industry: real estate agents earn 2.5-3% per side, car salespeople earn 20-25% of the profit margin, SaaS sales reps earn 8-12% of annual contract value, and retail sales associates earn 1-10% depending on the product.
What is the difference between commission and base plus commission?
Commission-only means 100% of your income comes from sales with no guaranteed pay. Base plus commission provides a guaranteed salary floor supplemented by commission on sales. Most sales roles offer a base-to-commission split such as 60/40 or 50/50 of on-target earnings.

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