How commission calculator works
A commission is the variable part of sales pay: a percentage of the sales you close, paid on top of (or instead of) a base salary. The simplest plan is flat — one rate applied to every dollar of sales. Sell $20,000 at a 5% rate and the commission is $1,000; the effective rate is exactly 5%.
Tiered plans pay different rates on different slices of sales, exactly like tax brackets. A common structure pays 5% on the first $10,000, 8% on the next $40,000 and 10% beyond that. Sell $60,000 and you earn $500 on the first bracket, $3,200 on the second and $1,000 on the third — $4,700 total, an effective rate of 7.83%. Each rate applies only to the slice inside its bracket, not to the whole sale.
The calculator computes either mode from your inputs, shows a per-bracket breakdown for tiered plans, and adds an optional base salary so take-home pay is base plus commission. The effective rate — commission divided by sales — is the honest single number for comparing any two plans.