Commission Calculator
Two reps can quote the same "up to 10% commission" and earn wildly different money, because the payout is decided by three mechanics that rarely appear in the job ad: whether tiers are marginal (each rate applies to its band, like tax brackets) or retrospective (the whole amount at the rate the total reaches); whether commission is computed on revenue or on gross profit; and how the draw interacts with the base. This calculator models all three. Enter the sales and the tier structure to see the payout line by line, switch the basis to gross profit to see what a discount-heavy deal actually pays, and enter a monthly draw to see whether it is fully recovered or carried forward. Managers get the same view from the other side: the effective rate the plan really costs as a percentage of revenue.
The short answer
A marginal tiered plan — 5% to $50k, 8% to $100k, 10% above — pays $8,500 on $120,000 of sales. The same plan run retrospectively pays $12,000, and on gross profit at a 30% margin it pays far less than on revenue. Read the plan's mechanics before quoting any rate.
Guaranteed amount advanced against commission and recovered from it.
Commission
$8,500.00
Effective rate 7.08% of revenue.
- 5% up to $50,000.00
- $2,500.00
- 8% from $50,000.00 up to $100,000.00
- $4,000.00
- 10% from $100,000.00 and above
- $2,000.00
- Total with base
- $11,500.00
Base $3,000.00 + commission.
How to use Commission Calculator
- 1
Enter sales and base
Use the sales booked in the period and the base salary for the same period — both monthly, both quarterly, whatever matches the plan.
- 2
Build the tier structure
Give the first two tiers ceilings and rates; the third tier is 'and above'. Then choose marginal (progressive bands) or retrospective (whole amount at the reached rate).
- 3
Pick the basis and add a draw
Revenue pays commission on the invoice; gross profit pays on margin. Add the monthly draw to see whether the commission covers it.
Why use this tool
- Marginal and retrospective tier modes — the ambiguity that decides most payouts
- Revenue or gross-profit basis, with the gap between them made visible
- Draw recovery modeled: covered, or carried forward as a shortfall
- Tier-by-tier breakdown so a paycheck can be reconciled to the plan
- Effective-rate figure showing what the plan really costs per revenue dollar
Frequently asked questions
- How do I calculate a tiered commission?
- In a marginal plan, each rate applies to the sales inside its band, like tax brackets: 5% of the first $50,000, 8% of the next $50,000, 10% above. On $120,000 that is $2,500 + $4,000 + $2,000 = $8,500. In a retrospective plan the entire $120,000 is paid at the top rate reached — 10% — which is $12,000. The label on the plan document decides which one you have.
- What is the difference between marginal and retrospective tiers?
- Marginal means progressive: crossing a tier boundary only changes the rate on the sales beyond it. Retrospective means the rate of the tier you reach applies to everything. The same '5/8/10 up to 50k/100k' structure pays $8,500 marginal and $12,000 retrospective on $120,000 — a 41% difference from one word in the comp plan.
- Should commission be based on revenue or gross profit?
- Gross profit, if you can — it pays reps for value instead of discounting tolerance. A rep who discounts 10% to close a $120,000 deal at a 30% margin has cost the company $12,000 of profit; on a revenue plan their commission is unchanged, and on some plans the discount actually increases it. Profit-basis plans price the discount into the payout.
- How does a draw against commission work?
- The rep is advanced a fixed amount each month — say $3,000 — and commission is used to repay it. In a recoverable draw, commission below the draw becomes a shortfall carried into future months; commission above it is paid as surplus. This calculator nets the draw against the period's commission and shows which side of that line you landed on.
- What is a good commission rate?
- It varies by margin structure: SaaS account executives commonly land at 8-12% of new revenue (or 20-30% of the first year's contract), while low-margin distribution runs 1-3%. The number that matters is the plan's effective rate — total commission divided by total sales — and whether it stays inside the margin the business needs to fund everything else.
- Is my sales data sent anywhere?
- No. The calculation runs entirely in your browser — quota figures, rates and comp structures never leave the page.
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