How do you calculate sales commission?

For a simple plan, multiply commissionable sales by the commission rate and then apply the rep split. This calculator can also apply a higher tier rate above a threshold, subtract a draw or advance, and add bonuses or base pay.

What is a recoverable draw?

A recoverable draw is an advance against future commission. In this calculator, the draw is subtracted from gross commission to estimate the current payout due.

Does this calculate payroll taxes?

No. This page estimates gross commission and compensation before payroll withholding, employer taxes, deductions, reimbursements, and plan-specific rules.

Sales commission calculator

Estimate gross commission, payout due, quota attainment, and total monthly compensation for flat-rate or tiered sales commission plans.

Handles base pay, bonuses, recoverable draws, split percentages, and a higher tier rate.
Shows the formula so sales reps, founders, and operators can audit the payout.
Runs in your browser and does not store compensation numbers.

Commission worksheet Client-side estimate

Commission result

Gross commission$2,500

Payout due$3,000

Total compensation$7,000

Quota attainment83.3%

Effective rate5.0%

Tiered amount$0

How the commission math works

The calculator separates commission earned from the actual payout due after draws, bonuses, and base pay.

Core formula

Gross commission = ((sales up to tier × base rate) + (sales above tier × tier rate)) × rep split.

Payout due equals gross commission minus any recoverable draw, plus one-time bonuses. Total compensation adds base pay for the period. If the tier threshold is 0 or higher than sales, all sales use the base commission rate.

What this estimate leaves out

Real sales plans may include clawbacks, accelerators by product line, caps, margin floors, territory splits, payroll withholding, refunds, and timing rules. Use this as a transparent worksheet before checking the signed plan.

Commission examples

These patterns cover the most common small-business sales payout questions.

Flat plan

$40,000 in sales at 4% commission creates $1,600 in gross commission before taxes or deductions.

Tiered plan

$90,000 in sales with 5% up to $75,000 and 8% above that creates $4,950 before split adjustments.

Draw plan

$3,200 gross commission with a $1,000 recoverable draw and $500 bonus produces a $2,700 commission payout due.

When to use this calculator

A quick payout worksheet is useful before payroll, offer letters, quota reviews, and founder-led sales planning.

Sales reps: estimate an expected commission check before the close of a month or quarter.
Founders: test whether a commission plan is motivating without breaking unit economics.
Operators: compare payout outcomes for base-plus-commission, split deals, and tiered accelerators.
Finance teams: sanity-check commission accruals before final payroll review.

FAQs

Short answers for common commission-plan terms.

Is commission calculated on revenue or profit?

Many simple plans use revenue, but some plans use gross profit, margin dollars, collected cash, or booked annual recurring revenue. Enter the amount your plan defines as commissionable sales.

What is an effective commission rate?

Effective commission rate is gross commission divided by commissionable sales. It helps compare flat and tiered plans after splits and thresholds.

Should base pay be included?

Include base pay when you want total compensation for the period. Leave it at $0 if you only want the commission payout.

Use these with commission planning to understand hiring cost, cash impact, and customer payment timing.