Commission calculator

Work out commission on sales, with an optional threshold, and add base pay for total earnings.

In shortCommission = (sales − threshold) × rate, if sales are above the threshold. Total pay = base pay + commission. $48,000 sales, a $20,000 threshold and 5% gives $1,400 commission.

Who uses itSales managers, payroll staff, salespeople
WhenEach commission period or when designing a plan
You needSales, threshold, commission rate and base pay
ResultCommission earned and total pay

Enter your figures

What the calculator does

Commissionable sales = sales − threshold (not below zero).

Commission = commissionable sales × rate.

Total pay = base + commission.

A commission example

A furniture salesperson sells $48,000 in a month. Commission starts above $20,000 at 5%, so it is $1,400. With $2,500 base pay, the month’s total is $3,900.

When to use it

Use it to check a commission payment, model a new plan or show a salesperson what a target is worth.

Commissioned employees may still be covered by minimum wage and overtime rules, depending on their role. Check before setting a plan with little or no base pay.

A second example

A salesperson at a car audio store earns a $2,200 monthly base and 6% on sales above $25,000. In January he sells $18,500, below the threshold, so commissionable sales and commission are $0.00 and total pay is the $2,200 base. In March he sells $33,600: commissionable sales are $8,600, commission is $516.00 and total pay is $2,716.00.

What your commission result means

Commission is figured at one flat rate on sales above the threshold, so tiered plans with rising rates need each tier run separately. The total adds commission to base pay and is gross, before taxes. A large sale that lands just after a period ends can change the result a lot, so the date your plan uses to count a sale matters as much as the rate.

Frequent commission mistakes

Paying commission on bookings that later cancel. Set out in the plan when a sale counts as earned.
Changing rates mid-period without notice. Make changes start at the next period and put them in writing.
Leaving the commission out of overtime for non-exempt staff. Include it in the regular rate.

Edits most teams make to the commission

Retail sales floorsUse a lower threshold and a smaller rate so newer staff can earn something early.

Field salesAdd a separate bonus for new accounts if growth matters more than volume.

Quick winModel the plan with your best and weakest seller’s real numbers. If the weakest earns nothing and the best earns too much, adjust the threshold.

What people ask about the commission calculator

What is a typical rate?

It varies widely by industry and product.

Is commission paid on returns?

Set clawback rules in the plan.

Do commissions count for overtime?

For non-exempt employees, commissions are usually included in the regular rate.

Should the plan be written?

Yes, and some states require it.

Does the threshold reset each period?

In this calculator it does, because the threshold is subtracted from each period’s sales. If your plan uses a quarterly or yearly threshold, enter that whole period’s sales and threshold, or a strong month after a slow one will be paid differently than the plan intends.

How do I handle a draw against commission?

A draw is an advance that is later subtracted from commission earned. This calculator treats base pay as guaranteed, so if your base is really a recoverable draw, subtract it from the commission instead of adding it.

More for the same job

Useful next steps

Skip the manual totals

Instead of adding up timesheets before you open the commission calculator, let EZTime total employee hours. Book a demo to see it with your team.

Book a demo Start a trial

General information and an estimate only. It is not legal, payroll, tax or financial advice. Rules vary by state and city. Check important results with a qualified professional.