Commission Calculator — Flat, Tiered and Real Estate

How to calculate commission

At a flat rate, commission is a percentage of sales:

commission = sales × rate

$200,000 in sales at 3% earns $6,000. The same relationship answers two other questions. To find the rate you were paid, divide the commission by the sales — $10,500 on $350,000 is 3%. To find the sales you need for a target, divide the target by the rate — $5,000 at 2.5% takes $200,000 in sales. Choose what to find and the calculator solves for it.

Tiered commission

Many sales plans pay more on sales above a threshold. The rates work like tax brackets: each one applies only to the sales inside its band, not to the whole amount.

Band	Rate	Sales in band	Commission
$0 – $20,000	3%	$20,000	$600
$20,000 and up	5%	$180,000	$9,000
Total	4.8% effective	$200,000	$9,600

Enter two limits and three rates, plus any base pay, and the result shows the commission in each band, the total and the effective rate. If your plan instead pays the higher rate on everything once you pass a threshold, use the flat rate with that rate.

Real estate commission

A real-estate commission is a percentage of the sale price, set in the agreements with the agents and negotiable. It is usually divided between the listing side and the buyer’s side, and each agent then shares their side with their brokerage. On a $400,000 sale at 5% total, the commission is $20,000; split evenly, each side gets $10,000, and an agent on a 70% split keeps $7,000 of it. The seller’s proceeds before other closing costs are the price minus the total commission. Enter the numbers from your own agreements — rates and who pays the buyer’s agent vary.

Commission, base pay and taxes

Commission is wages. Employers may withhold federal income tax on commissions as supplemental wages, often at a flat percentage, so the withholding can differ from a regular paycheck; the tax owed for the year is the same either way. Under federal wage law, commissioned employees are generally still owed at least the minimum wage, and some retail employees paid mostly in commissions are exempt from overtime under specific conditions. To compare total pay with an hourly wage or a salary, use the hourly to salary calculator; for the percentage change in your pay, the pay raise calculator; and for the profit on what you sell, the margin calculator.

Frequently asked questions

How do you calculate commission?

Multiply the sales by the commission rate: $200,000 × 3% = $6,000. To find the rate, divide the commission by the sales; to find the sales you need, divide the commission you want by the rate.

How does tiered commission work?

Each rate applies only to the sales inside its band. With 3% up to $20,000 and 5% above, $200,000 in sales earns $600 on the first band and $9,000 on the rest — $9,600, an effective 4.8%.

How is a real estate commission split?

The total commission is divided between the listing side and the buyer's side, as set in the listing and buyer agreements, and each agent then splits their side with their brokerage. The calculator shows every share from the numbers you enter.

Is commission taxed differently?

Commissions are wages for income tax. Employers may withhold federal income tax on them as supplemental wages, often at a flat rate, so withholding can look different from your regular paycheck (IRS Publication 15).

How many sales do I need to earn a target commission?

Divide the target by the rate: to earn $5,000 at 2.5%, you need $200,000 in sales. Choose Find the: Sales needed.