Commission = Sales x Commission Rate. For a flat 6% rate on $80,000 of sales: $80,000 x 0.06 = $4,800. In tiered structures, different rates apply to different sales bands - for example 4% on the first $50,000 and 6% on sales above $50,000. This calculator handles both flat and tiered scenarios and shows the step-by-step breakdown for each.

A tiered (graduated) commission structure pays higher rates on higher bands of sales. For example: 4% on the first $50,000, 6% on $50,001-$100,000, and 8% on everything above $100,000. This rewards high performers with accelerating pay and motivates reps to push past quota thresholds. The effective rate shown in the calculator is the blended overall rate across all tiers.

Commission rates vary widely by industry. Software and SaaS: 6-12%. Real estate: 2.5-3% per agent side. Financial products: 0.25-1%. Retail: 1-3%. Recruiting/staffing: 15-25% of placed salary. The 'right' rate depends on deal size, sales cycle length, the percentage of total comp it represents, and industry norms. A rep earning 100% of their income from commission typically needs a higher rate than one on a salary-plus-commission plan.

In a tiered structure, each tier has its own rate, but the combined commission divided by total sales gives the effective (blended) rate. A rep with $120,000 in sales on a 4/6/8% tiered plan earns: $2,000 (4% on $50k) + $3,000 (6% on $50k) + $1,600 (8% on $20k) = $6,600 total - an effective rate of 5.5%, even though the top tier is 8%.

Enter only the sales you want to calculate commission on (i.e., the commissionable revenue, which may exclude services or heavily discounted deals). Multiply that by your commission rate. Your base salary is then added separately. This calculator focuses on the commission portion - add your base salary to the result to see total compensation.

A draw is an advance payment made to a sales rep before commissions are earned, which is then 'drawn back' (i.e., deducted) once commissions are calculated. A recoverable draw means the rep must repay unearned advances. A non-recoverable draw is essentially a guaranteed floor amount. Draws are common in industries with long sales cycles where reps would otherwise go months without income.