Commission Calculator Model flat, tiered, base+commission, and team/override plans — with visual breakdowns and negotiati...
Commission Calculator
Model flat, tiered, base+commission, and team/override plans — with visual breakdowns and negotiation insights.
• Flat Rate
Simple % of total sales (e.g., 5% on all sales). Easy to understand, but doesn’t reward overperformance.
• Tiered (Progressive)
Higher rates apply to sales above thresholds (e.g., 5% up to $50K, 8% above). Strongly incentivizes exceeding quota.
• Base + Commission
Guaranteed base salary + % of sales (e.g., $3K/mo + 4%). Balances security and upside — common in SaaS, pharma, auto.
• Team / Override
Earn commission on personal sales + % of team’s sales (e.g., 6% personal + 2% override). Used for managers, agency owners.
⚠️ Key Insight: Tiered and team plans amplify motivation — but flat plans reduce admin complexity and disputes.
Real-world commission rates by field (pre-tax, gross):
| Industry | Typical Rate | Notes |
|---|---|---|
| Real Estate | 2.5–3.0% | Per side; split with broker & team |
| Insurance | 10–20% | First-year premium; renewal 2–5% |
| SaaS Sales | $50K–$150K/yr OTE | OTE = On-Target Earnings (60% variable) |
| Auto Sales | $150–$500/car | + holdback, spiffs, volume bonuses |
| Financial Advisors | 1–2% AUM | Assets Under Management (recurring) |
✅ Top performers often earn 2–3× quota in commission-heavy roles.
Under U.S. law (FLSA, DOL), commissions must meet strict criteria to be valid:
- No clawbacks after 90 days — Once paid, commissions can’t be taken back (with rare exceptions like fraud).
- Written plan required — Employers must provide a clear, signed commission agreement.
- Minimum wage guarantee — Even 100% commission jobs must ensure $7.25/hr (federal) or state min wage.
- Tax withholding — Commissions are supplemental wages: taxed at 22% (or 37% if >$1M), unless annualized.
❌ Avoid: “Draw against commission” with indefinite repayment, or plans that exclude returns/cancellations unfairly.
- Select your commission structure.
- Enter sales, rates, base salary, or team data.
- For tiered: adjust thresholds & rates (add more rows via code if needed).
- Click “Calculate Commission”.
You’ll see:
- Gross commission and total comp (base + commission)
- Effective rate (total commission ÷ total sales)
- Visual ladder (tiered) or bar comparison (team)
Note: This tool estimates gross commission. Actual net pay depends on taxes, deductions, and plan specifics.