Commission Calculator
Calculate sales commissions accurately using different commission structures. Perfect for sales teams, managers, and HR departments to plan compensation strategies.
Flat Rate
A fixed percentage applied to all sales. Simple and straightforward for consistent commission rates.
Tiered
Different rates for different sales thresholds. Higher rates kick in as you reach new tiers.
Progressive
Different rates apply to specific ranges of sales. Each range has its own commission rate.
Hybrid
Combines a base rate with bonus rates after reaching certain thresholds. Balances guaranteed income with performance incentives.
How to Calculate Commission: Complete Guide
Understanding commission calculation is crucial for sales professionals and business owners. Learn about different commission structures and when to use each type.
A fixed percentage applied to all sales. Simple and predictable for both employer and employee.
Different rates for different sales thresholds. Rewards high performance with increasing rates.
Different rates apply to specific ranges of sales. Each range is calculated independently.
Combines base rate with performance bonuses. Provides security with upside potential.
Key Design Principles
- • Simplicity: Keep structures easy to understand and calculate
- • Fairness: Ensure commission rates are competitive within your industry
- • Motivation: Structure should encourage desired behaviors
- • Sustainability: Rates should be profitable for the business
- • Transparency: Clear communication about how commissions are calculated
Industry Benchmarks (South Africa)
How do I choose the right commission structure?
Consider your business goals, sales cycle length, product margins, and team motivation. Flat rates work well for simple products, while tiered structures motivate higher performance. Progressive structures work well for long sales cycles, and hybrid models provide security with upside.
Should commission be calculated on gross or net sales?
Most companies calculate commission on net sales (after returns, discounts, and cancellations) to ensure reps focus on quality sales. However, the specific terms should be clearly defined in employment contracts.
How often should commission be paid?
Commission payments typically align with sales cycles and cash flow. Monthly payments are common for shorter sales cycles, while quarterly payments work for longer cycles. Consider your cash flow and administrative capacity when deciding.
What about commission caps and clawbacks?
Commission caps can protect against windfall earnings from unusually large deals, while clawbacks help recover commission on cancelled or returned sales. Both should be clearly communicated and applied fairly across the team.
Multiple Structures
Support for flat rate, tiered, progressive, and hybrid commission models with preset templates.
Real-time Results
Instant calculations with detailed breakdowns and performance insights as you type.
Export & Save
Export calculations to PDF or Excel, and save your calculation history for future reference.