Commission Calculator
Work out the commission on a sale, the sales you need to hit a target, or the rate you were paid, with tiers, quota, splits, base salary and draws.
The sale amount above is your first sale. Commission and tiers use the total.
Sale price minus what the goods cost you, as a % of the price.
1.5 pays 1.5 times the rate on sales above quota.
Paid on each sale on top of the rate.
The first person is you. Share is their part of the commission; keeps is what they keep after their company or brokerage takes its cut.
Transaction, desk or franchise fees.
Breakdown and pay at different sales
What you'd earn at different sales
| Sales | Commission | Your share | Total pay |
|---|
How your commission is worked out
Commission = sales × commission rate, then any bonus, split, fees and base pay.
- 1
Your sales
Sale amount= $20,000
- 2
Commission
$20,000 × 5%= $1,000
- 3
Your share
$1,000 × 100%= $1,000
- 4
Effective rate
$1,000 ÷ $20,000= 5%
Read more: the formula, a worked example, tiers, quota, splits and draws
Commission is the part of a sale paid to the person who made it. Most plans are a simple % of sales, but many add tiers, a quota with accelerators, bonuses, a split with other agents or a company, a base salary and a draw. This calculator handles each of these in that order.
The formula
commission = sales × rate
rate = commission ÷ sales
sales needed = commission wanted ÷ rate
on gross profit: commission = sales × margin × rate
marginal tiers: commission = sum of (sales in each tier × that tier's rate)
whole-amount tiers: commission = sales × rate of the highest tier reached
with an accelerator: commission at quota + accelerator × (commission − commission at quota)
your share = (commission + bonuses) × share × keeps − fees
total pay = base salary for the period + your share (or the draw, if that's more)
Worked example
A $20,000 sale at a 5% commission rate earns $20,000 × 5 ÷ 100 = $1,000. Working backwards, $1,000 ÷ 5% = $20,000 of sales, and the rate is $1,000 ÷ $20,000 = 5%.
Tiers: whole amount vs slice by slice
Take tiers of 5% from $0, 7.5% from $10,000 and 10% from $25,000, and $30,000 of sales in a month.
- Slice by slice (marginal): $10,000 × 5% + $15,000 × 7.5% + $5,000 × 10% = $500 + $1,125 + $500 = $2,125. Each extra sale earns the rate of the tier it lands in, so there is never a sudden jump.
- Whole amount: $30,000 reaches the 10% tier, so all of it earns 10% = $3,000. Here crossing a line matters a lot: $9,999 earns $499.95, but $10,000 earns $750.
Quota, accelerators and bonuses
With a $20,000 quota and a 1.5× accelerator, $30,000 of sales at 5% earns $1,000 on the first $20,000 and $10,000 × 5% × 1.5 = $750 on the rest: $1,750, which is 150% of quota. A $500 bonus for hitting quota makes it $2,250. A gate of 50% means nothing is paid on the rate until sales reach $10,000.
Splitting a commission (example: a home sale)
As an example, a home sells for $400,000 with a 5% total commission: $20,000. The listing side and the buying side take 50% each, $10,000. The listing agent keeps 70% after their brokerage's 30% cut, which is $7,000, and pays a $500 transaction fee, leaving $6,500. These figures are an example only: commission rates, side splits and brokerage splits differ by country, firm and deal, and are usually negotiable.
Base salary and on-target earnings
A base salary of $36,000 a year is $3,000 a month. With $1,000 of commission the month's pay is $4,000. On-target earnings (OTE) is the pay at exactly 100% of quota: with a $20,000 monthly quota at 5% that is $3,000 + $1,000 = $4,000 a month.
Draw against commission
With a $2,000 monthly draw and $1,000 of commission, you are paid the $2,000 draw. If the draw is recoverable, the $1,000 gap is taken from next month's commission (enter it as "draw still owed"). If it is non-recoverable, the $2,000 works as a minimum and nothing is paid back. When commission beats the draw, you get the commission (less anything still owed).
This is an estimate of gross pay before tax. Real plans can have caps, clawbacks for returns or cancelled deals, and rules for when a sale counts, so check your plan document.
Common questions
How do you calculate commission?
Multiply the sale amount by the commission rate. A $20,000 sale at 5% earns $20,000 × 0.05 = $1,000. If you made several sales in the period, add them up first. With a base salary, your total pay is the base plus the commission.
How do I work out a commission rate?
Divide the commission by the sale amount and multiply by 100. If you were paid $1,000 on a $20,000 sale, the rate is $1,000 ÷ $20,000 = 0.05, or 5%. Use the Rate needed option above to find the rate that gives a set amount.
How much do I need to sell to earn a set commission?
Divide the commission you want by the rate. To earn $1,000 at 5% you need $1,000 ÷ 0.05 = $20,000 of sales. With tiers, splits or fees it is harder to do by hand, so the calculator tries sales amounts until your pay matches the target.
What is the difference between tiered and marginal commission?
With whole-sale tiers, all your sales earn the rate of the highest tier you reach. With marginal (slice by slice) tiers, each slice earns its own rate, like tax brackets. On $30,000 with tiers of 5% to $10,000, 7.5% to $25,000 and 10% above, whole-sale tiers pay $3,000 and marginal tiers pay $2,125.
How does a draw against commission work?
A draw is an advance paid each period. If your commission is less than the draw, you still get the draw. With a recoverable draw, the shortfall is taken from later commission: a $2,000 draw with $1,000 of commission leaves $1,000 to pay back. A non-recoverable draw is a minimum you never repay.
How is a real estate commission split?
The total commission is often split between the listing side and the buying side, and each agent then shares their part with their brokerage. As an example, 5% of $400,000 is $20,000; split 50/50 that is $10,000 a side, and an agent who keeps 70% takes home $7,000 before fees. Rates and splits vary by country and are negotiable.
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