Question 1

How is sales commission calculated?

Accepted Answer

At a flat rate, commission is the sale amount times the rate: 10,000 at 5% pays 500. On a tiered plan each rate applies only to the part of the sale inside its bracket, so with 5% up to 10,000, 7% up to 50,000 and 10% above that, a 60,000 sale pays 500 + 2,800 + 1,000 = 4,300. On a split, the commission is worked out first and then divided by your share.

Question 2

What is the difference between a tiered and a flat commission?

Accepted Answer

A flat plan pays one rate on every dollar. A tiered plan raises the rate as you sell more, and in many plans the higher rate only applies to the dollars above each threshold, not to the whole sale. That is how this calculator applies tiers. Some plans instead pay the higher rate on everything once you cross a threshold (often called a retroactive tier); check your plan document to see which one yours uses.

Question 3

What is a normal commission rate?

Accepted Answer

There is no single normal rate. It depends on the industry, the size and margin of what you sell, how much of your pay is base salary and whether you find the deals yourself. Your compensation plan is the only number that counts, so enter the rate it states rather than a figure from a survey.

Question 4

What should I do with the number?

Accepted Answer

Use it to check a commission statement, compare two plans before you accept an offer, or see what one more deal a month adds with the monthly view. If your statement and this page disagree, the difference is usually a tier boundary, a split or a clawback, which is worth raising with whoever runs payroll or sales operations.

Question 5

Is my data saved or sent anywhere?

Accepted Answer

The calculation runs in your browser and ParrotNotes does not store your numbers. They sit in the page address so you can bookmark or share the result. You do not need an account, and clearing the fields removes them from the address.

Commission Calculator

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