π° Commission Calculator
Tiered or flat commission payouts from your sales total.
Total Commission Earned
Estimates for planning only, not financial advice.
How to Use This Calculator
Enter your total sales for the period, set up to three commission tiers with their rates, and choose whether the plan is graduated or flat. The calculator breaks the payout down tier by tier so you can verify every dollar.
Enter your Total Sales for the commission period. This is usually closed or collected revenue, depending on your plan.
Set the tiers. Tier 1 covers the first $X at its rate, Tier 2 covers the next $Y at its rate, and Tier 3 pays its rate on everything above. To use only two tiers, set a tier amount to 0.
Choose the Commission Type. Graduated applies each rate only to its slice; Flat applies the highest reached tier\'s rate to the entire sales total.
Read the tier-by-tier breakdown to verify the payout, and copy the total for your records or commission statement.
How Tiered Commission Math Works
Graduated math works like income tax brackets: you fill the lowest tier first, then spill into the next. With tiers of 4 percent on the first $50,000, 6 percent on the next $50,000, and 9 percent above, a $120,000 sale fills tier 1 ($50,000 x 4% = $2,000), fills tier 2 ($50,000 x 6% = $3,000), and puts the last $20,000 in tier 3 ($20,000 x 9% = $1,800), for $6,800 total. The effective rate is 6,800 / 120,000 = 5.67 percent, which sits between the tier rates, exactly as it should.
Worked Example
Sales rep closes $120,000 in a quarter. Plan: 4 percent on the first $50,000, 6 percent on the next $50,000, 9 percent on everything above. Graduated payout: tier 1 = $2,000, tier 2 = $3,000, tier 3 = $1,800, total = $6,800 (effective rate 5.67 percent). Switch the same plan to flat: the rep reached tier 3, so the whole $120,000 earns 9 percent = $10,800. The flat version costs the company $4,000 more for identical sales, which is why finance teams almost always push for graduated plans while reps negotiate flat accelerators.
Designing a Plan That Motivates
A good plan pays roughly market rate at 100 percent of quota and gets exciting above it. That usually means a base tier that protects a living wage at 70 to 80 percent of quota, an at-quota rate that delivers the promised on-target earnings, and an uncapped accelerator tier that makes a 150 percent quarter feel life-changing. Avoid cliffs, where crossing a threshold by one dollar changes the rate on everything below it; they create end-of-quarter gaming and resentment. And write the edge cases down before the quarter starts: how are refunds, discounts, multi-year deals, and split deals credited. Most commission disputes are not about math, they are about rules nobody wrote down.
Estimates for planning only, not financial advice.
Frequently Asked Questions
What is a graduated (tiered) commission?
In a graduated plan, each slice of sales earns its own rate: only the dollars inside a tier get that tier's rate. With tiers of 4 percent on the first $50,000, 6 percent on the next $50,000, and 9 percent above $100,000, a $120,000 sale pays $2,000 + $3,000 + $1,800 = $6,800. The lower tiers are not re-rated when you cross a threshold.
How is graduated different from flat commission?
A flat plan applies one rate to the entire sale, usually the rate of the highest tier reached. On the same $120,000 sale above, a flat 9 percent plan pays $10,800, almost 60 percent more than the graduated $6,800. Employers prefer graduated plans because payouts grow smoothly; salespeople prefer flat plans because crossing a threshold boosts the whole check.
How do I set fair commission tiers?
Start from the on-target earnings you promised: a $70,000 base plus $50,000 of expected commission means the tiers must pay about $50,000 at target sales. Put the first tier around 70 percent of quota, the middle at quota, and the top tier above quota as an accelerator. Test the plan at 50, 100, and 150 percent of quota in this calculator to make sure payouts look fair at every level.
What is a commission clawback?
A clawback takes back commission if the deal falls through, for example if the customer cancels during a trial period or never pays. Many plans pay commission only on collected revenue, or hold back a portion for 60 to 90 days. If your plan has clawbacks, the number this calculator gives is the gross earned amount before any reversals.
Should commission be capped?
Caps limit the maximum payout per deal or period, which protects the company from windfall deals but can demotivate top performers right when they are hottest. Most modern plans skip caps and use decelerators instead, paying a lower rate beyond a very high tier. If your plan is uncapped, this calculator handles any sales figure with no ceiling.