Commission Calculator
Calculate sales commissions, real estate fees, and commission-based earnings
The Commission Calculator helps sales professionals, real estate agents, and commission-based workers calculate their earnings based on sales volume and commission rates. Whether you're working with flat rates, tiered structures, or percentage-based commissions, this tool provides accurate calculations for your compensation planning.
Commission Calculation
Commission Breakdown
Commission Details
Deductions
Performance Metrics
Recommendations
Track all business expenses for potential tax deductions
Consider setting aside 25-30% of commission income for taxes
How to Use
1. Select your commission type (percentage, flat rate, tiered, or graduated)
2. Enter your total sales amount
3. Input the commission rate or structure details
4. Add any deductions like taxes or fees
5. Review your gross and net commission calculations
6. Use the breakdown to understand your earnings structure
Commission Types
Percentage Commission
Commission = Sales Amount × Commission Rate
Most common for real estate, insurance, and sales roles
Flat Rate Commission
Commission = Fixed Amount × Number of Sales
Common for car sales and retail environments
Tiered Commission
Different rates apply to different sales ranges
Encourages higher sales volume with increasing rates
Graduated Commission
Base rate + bonus rate above threshold
Provides incentive to exceed sales targets
Industry Standards
Real Estate
Typically 5-6% of sale price, split between buyer and seller agents
Car Sales
Usually 20-25% of gross profit or flat fee per vehicle
Insurance
First-year: 50-90%, Renewals: 2-15% of premiums
Software Sales
5-15% for new business, 2-5% for renewals
Tax Considerations
Important Tax Information:
• Commission income is subject to federal and state income taxes
• Self-employed individuals pay self-employment tax (15.3%)
• Employees have taxes withheld by employer
• Business expenses may be deductible
• Consider quarterly estimated tax payments for large commissions
Example Calculation
Real Estate Example:
• Home sale price: $500,000
• Commission rate: 6%
• Gross commission: $30,000
• Split with buyer's agent: $15,000
• Broker split (50%): $7,500
• Taxes (25%): $1,875
• Net commission: $5,625
Frequently Asked Questions
When are commissions typically paid?
Payment timing varies by industry - real estate at closing, sales monthly or quarterly, insurance upon policy activation.
Are commissions guaranteed?
No, commissions are typically "at-risk" income that depends on sales performance and may be subject to chargebacks.
How do draws against commission work?
A draw is an advance against future commissions, providing steady income but must be repaid from earned commissions.