Free Sales Commission Calculator
Enter the sale value and the commission rate to get what is owed to the seller and what remains to the business. Useful for checking a payout before it goes out.
Fill in the fields and the result appears here as you type.
How sales commission is calculated
Commission is the sales figure multiplied by the rate: sales × rate ÷ 100. The net is what remains of that sale once the commission is paid.
The rate is applied to whatever you enter, so the answer is only as meaningful as the base. Commission on revenue and commission on gross profit are different schemes and produce very different numbers on the same sale.
A worked example
A salesperson closes 42,000 in the month on a 3.5% rate.
- Commission
- 42,000 × 3.5 ÷ 100 = 1,470
- Net after commission
- 42,000 − 1,470 = 40,530
Check the commission against the margin on those sales, not against the revenue. On a 10% margin, 3.5% of revenue is more than a third of the profit.
Questions about sales commission
Should commission be paid on revenue or on profit?
Paying on revenue is simpler and easier to check, but it rewards volume regardless of price — a salesperson can discount heavily and still earn well. Paying on gross profit aligns the incentive with what the business keeps, at the cost of the salesperson needing to see margin data.
How do I calculate tiered commission?
Run each band separately and add the results. For 3% on the first 50,000 and 5% above it, calculate 3% of 50,000, then 5% of whatever exceeds it, and total the two. This calculator handles one rate at a time, which is what each band needs.
Is commission calculated before or after VAT?
On the net figure, excluding VAT. The tax was never revenue, so paying commission on a VAT-inclusive total pays the salesperson a share of money owed to the tax authority.