How do I calculate a sales commission?

Multiply sales volume by the commission rate. Then add base salary to estimate total income for the period.

How do I know how much I need to sell for a target?

Subtract base salary from the target income and divide the result by the commission rate.

Use it as a base. For tiered plans, calculate each tier separately and add the commissions.

This calculator estimates a simple commission plan for sales reps, managers, freelancers, and small teams.

Commission

Commission = Period sales x (Commission percent / 100)

Sales needed for target

Sales needed = (Income target - Base salary) / Commission rate

With 25,000 in sales, a 5% commission, and 3,000 base salary, commission is 1,250 and total income is 4,250. To reach 5,000, sales need to be 40,000.

Tiered plans

If commission changes by tier, calculate each tier separately. This page covers the common linear case.

It depends on the contract. Some teams use gross sales, collected sales, sales before VAT, or gross margin.

Compare the calculated result with the cap. If it exceeds the allowed maximum, use the cap as the final commission.