Flat and tiered commission
With a flat plan, you earn the same percentage on every sale. With a tiered plan, the rate steps up as your sales grow, which rewards stronger months. The tool takes your sales, slices them into the tiers you set, applies each rate to its slice, and adds the pieces together.
Tips
- Compare plans: run the same sales through a flat and a tiered plan and see which pays more at your usual level.
- Turn a pay figure into an hourly rate with the hourly to salary converter.
- Check what a sale really earns the business with the profit margin calculator.
Frequently asked questions
How is flat commission calculated?
Commission = sales × rate ÷ 100. At 5% on 250,000 of sales the commission is 12,500.
What is tiered commission?
The rate changes as sales go up. Each rate applies only to the slice of sales inside that tier. With 2% on the first 100,000, 4% on the next 400,000 and 6% above that, sales of 750,000 earn 2,000 + 16,000 + 15,000 = 33,000.
Is the higher rate paid on all my sales?
In this tiered model, no. It is a marginal system: each slice of sales earns its own rate. Some employers pay the top rate on everything once you pass a target, so check your contract.
What about a base salary?
Enter it in the base pay box. The calculator adds it to the commission to show your total pay for the period.
Is commission taxable?
Usually yes, as part of your income. Check your local tax rules.