Commission Calculator
Flat vs. Tiered Commission Change Your Incentives Differently
A flat commission pays the same rate on every dollar of sales; a tiered structure pays a lower rate up to a threshold and a higher rate above it, rewarding sales reps for pushing past a quota rather than coasting once they've hit it. This calculator handles both structures and shows exactly how the total commission is built up from each portion of sales.
The Formulas
Flat: Commission = Sales Amount × (Commission Rate / 100)
Tiered: Tier 1 Commission = min(Sales, Threshold) × Tier 1 Rate
Tier 2 Commission = max(0, Sales − Threshold) × Tier 2 Rate
Total Pay = Base Salary + Commission
Tiered: Tier 1 Commission = min(Sales, Threshold) × Tier 1 Rate
Tier 2 Commission = max(0, Sales − Threshold) × Tier 2 Rate
Total Pay = Base Salary + Commission
How a Tiered Structure Rewards Exceeding Quota
| Total sales | Tier 1 commission | Tier 2 commission | Total commission |
|---|---|---|---|
| $30,000 | $1,500.00 | $0.00 | $1,500.00 |
| $50,000 | $2,500.00 | $0.00 | $2,500.00 |
| $75,000 | $2,500.00 | $2,000.00 | $4,500.00 |
| $100,000 | $2,500.00 | $4,000.00 | $6,500.00 |
| $150,000 | $2,500.00 | $8,000.00 | $10,500.00 |
Once sales pass the $50,000 threshold, every additional dollar earns the higher Tier 2 rate — the Tier 1 commission stays fixed at $2,500 no matter how far above the threshold sales climb.
Where This Gets Used
- Verifying a commission paycheck — especially under a tiered plan, where manual math is easy to get wrong once sales cross the threshold.
- Comparing job offers with different commission structures — modeling the same projected sales figure under two different plans to see which pays more.
- Setting sales targets as a manager — designing a threshold and tier rates that meaningfully reward exceeding quota without over-costing the base cases.
How to Use This Calculator
- Choose Flat Commission Rate or Tiered Commission.
- For Flat, enter Base Salary (optional), Sales Amount, and Commission Rate.
- For Tiered, enter Base Salary (optional), Sales Amount, Tier 1 Threshold, Tier 1 Rate, and Tier 2 Rate.
- Select Calculate to see the commission breakdown and total pay.
Related Calculations
See how commission income affects your net pay with the Take-Home Pay Calculator, or compare a commission-based offer against a straight salary with the Job Offer Comparison Calculator.