Commission Calculator
A sales commission is a percentage of sales revenue paid to a salesperson as compensation for generating business. Commission structures vary widely — flat rate, tiered (higher rate at higher volumes), split (between multiple reps), or residual (recurring on ongoing contracts).
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Tip: Understand your commission structure before joining a sales role. A 6% commission with high quotas can earn less than a 3% commission with achievable targets. Always model realistic scenarios.
- 1Commission = Sales × Commission rate
- 2Total earnings = Base salary + Commission
- 3OTE (On-Target Earnings) = Base + expected commission at quota
- 4Commission rate typically ranges from 2–10% for most industries
$80,000 in sales, 5% commission, $2,000 base=$6,000 commission, $8,000 total$80,000 × 0.05 = $4,000 + $2,000 base
Tiered: 3% on first $50k, 6% above=$4,500 on $75k sales$1,500 + $3,000 from different tiers
| Industry | Commission Range | Notes |
|---|---|---|
| Real estate | 2.5–3% | Of sale price, split with broker |
| Insurance | 5–20% | Higher for life insurance |
| Software/SaaS | 8–12% | Of Annual Recurring Revenue |
| Retail | 1–3% | Plus bonuses on targets |
| Pharmaceuticals | 2–8% | Territory-based |
| Financial services | 0.5–5% | AUM or transaction-based |
| Recruitment | 15–25% | Of placed candidate salary |
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Fun Fact
The term "commission" comes from Latin "commissio" (to entrust). Medieval merchants used commission agents to sell goods in distant markets — a practice that drove global trade before modern corporations.
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