Commissions are often calculated as a percentage of sales, revenue, or another agreed amount.
Commission Formula
Use:
Commission = Sales Amount × (Commission Rate ÷ 100)
Suppose a salesperson generates $20,000 in eligible sales and earns a 5% commission.
Calculate:
20,000 × 0.05 = 1,000
The commission is $1,000.
Finding the Commission Rate
If someone receives a $750 commission from $15,000 in eligible sales:
(750 ÷ 15,000) × 100 = 5%
The commission rate is 5%.
For simple percentage calculations like these, you can use the Percentage Calculator.
Check the Commission Structure
Real commission plans can include thresholds, tiers, bonuses, exclusions, returns, or different rates for different products. Always check the applicable compensation agreement before calculating expected earnings.