Sales commission formula
Commission equals eligible sale value multiplied by rate divided by 100. On a 5000 sale at 5%, the payout is 250 and the amount remaining after commission is 4750. That remaining amount is revenue after commission, not profit: product costs, overhead and other expenses have not been deducted.
Choose the correct commission base
An agreement may pay on invoiced revenue, collected revenue, eligible products or gross profit. Enter the amount the agreement actually uses. For a 1000 invoice with a 100 discount, a rate of 8% applied to 900 gives 72. Applying it to the original invoice would give 80, a different basis.
Tiered commission worked example
For marginal tiers paying 5% on the first 10000 and 8% on the next 5000, calculate 500 plus 400 for a total of 900. A retroactive plan applying 8% to all 15000 would instead pay 1200. This tool calculates one flat rate at a time; use separate calculations for marginal bands.
Split payouts and effective rate
If two people share a 600 commission equally, each receives 300. To find the effective rate from a known payout, divide payout by eligible sales and multiply by 100: 300 on 6000 is 5%. This is an explanatory calculation; the tool's inputs remain sale value and rate. Base salary, taxes, fees and later refund adjustments are outside the result.