Commission Calculator

A flat rate commission is a fixed percentage (or dollar amount) paid on every dollar of sales regardless of volume. For example, a 5% flat rate on $50,000 in sales yields $2,500. It's simple, predictable, and easy to administer — popular in retail and straightforward B2B roles.

Tiered commission increases the rate as sales hit higher thresholds. In progressive mode, each slice of revenue is paid at its tier rate (like income tax brackets). In flat mode, the entire revenue is paid at the highest achieved tier rate. Progressive mode is more nuanced; flat mode is a stronger motivator once a threshold is crossed.

Split commission distributes a single deal's commission across multiple sales reps or parties. Common in co-selling, referral partnerships, or where an inside sales rep and an account executive collaborate on a deal. Each party's share is proportional to their agreed split percentage.

Gross margin commission is calculated on profit (Revenue − COGS) rather than gross revenue. It's best when sales reps have pricing authority or when deal profitability varies widely. It incentivises reps to protect margin rather than discount heavily to close, aligning their interests with company profitability.

Recurring commissions apply a percentage to each month's revenue for the life of the contract. You can factor in monthly churn — accounts that cancel — to get a more realistic lifetime commission projection. For SaaS businesses, annual recurring revenue (ARR) and lifetime value (LTV) calculations are critical metrics for compensation planning.

Commission rates vary widely by industry. Typical ranges: SaaS/Technology 5–15%, Financial Services 20–40%, Real Estate 3–6%, Retail 2–10%, Pharmaceutical 5–10%, Insurance 10–30%. Rates depend on deal size, sales cycle length, base salary, and company growth stage. Higher-effort, longer-cycle sales tend to command higher commission percentages.