Calculator
Sales commission calculator
Leave the tier and draw at 0 for a flat plan.
Commission$4,250.005% of $85,000 in sales
| Base pay for the period | $2,500.00 |
|---|---|
| Total gross pay | $6,750.00 |
| Federal tax at the 22% supplemental rate | $935.00 |
If your employer pays commission separately from salary it may withhold federal tax at a flat 22%; FICA (7.65%) and state tax apply as well.
How to calculate commission
Multiply the sales that earn commission by the rate. Then add base pay, if any:
- Straight commission: pay = sales × rate. $40,000 × 6% = $2,400.
- Base plus commission: pay = base + sales × rate. $2,500 + $85,000 × 5% = $6,750.
- Tiered commission: each band of sales has its own rate. 5% on the first $50,000 and 8% above it turns $85,000 of sales into $2,500 + $2,800 = $5,300, an effective 6.24%.
- Gross margin commission: the rate applies to profit, not revenue. Enter the margin dollars as "sales".
Commission at common rates
| Sales | 2% | 3% | 5% | 7% | 10% | 15% |
|---|---|---|---|---|---|---|
| $10,000 | $200 | $300 | $500 | $700 | $1,000 | $1,500 |
| $25,000 | $500 | $750 | $1,250 | $1,750 | $2,500 | $3,750 |
| $50,000 | $1,000 | $1,500 | $2,500 | $3,500 | $5,000 | $7,500 |
| $75,000 | $1,500 | $2,250 | $3,750 | $5,250 | $7,500 | $11,250 |
| $100,000 | $2,000 | $3,000 | $5,000 | $7,000 | $10,000 | $15,000 |
| $250,000 | $5,000 | $7,500 | $12,500 | $17,500 | $25,000 | $37,500 |
Draws against commission
A draw is an advance paid each period whatever you sell. When commission comes in, the draw is subtracted. If commission is $3,000 on a $2,000 draw, you get $1,000 more. If it is only $1,500, a recoverable draw carries the $500 shortfall into the next period; a non-recoverable draw absorbs it. Read the plan document: which kind you have changes what you take home in slow months.
How commission is taxed
Commission is wages. Social Security (6.2%) and Medicare (1.45%) apply to every dollar, and so does state income tax. For federal income tax, commission paid separately from regular wages is a supplemental payment, and the employer may withhold a flat 22% (37% on supplemental pay over $1 million in a year)[p15]. If the commission is added to a regular paycheck instead, the whole check is withheld with the normal tables, which can look higher for that one check.
Withholding is not the final taxThe 22% rate is only a prepayment. Your actual tax depends on total income for the year; too much withheld comes back as a refund. To see a full paycheck with commission included, add it to salary in the paycheck calculator or your state page, such as the New York paycheck calculator.
Commissioned employees still have overtime rights unless an exemption applies. Retail and service workers paid mostly by commission can be exempt when their regular rate exceeds 1.5 times the minimum wage and more than half their pay is commission[fs20]; outside sales employees are exempt by duties. Others earn overtime based on a regular rate that includes commission: see the time and a half calculator. For a raise in your commission rate or base, the pay raise calculator shows the percentage change.
Frequently asked questions
How do I calculate 3% commission?
Multiply sales by 0.03. $120,000 in sales earns $3,600; $20,000 earns $600.
What is a commission calculator used for?
To work out commission on a sale or a period of sales at a flat or tiered rate, add base pay, and net out a draw, so you can check a commission statement or compare pay plans.
Is commission taxed at 22%?
Federal income tax may be withheld at a flat 22% when commission is paid separately from regular wages. That is withholding, not the final tax. FICA and state tax also apply.
What is a typical sales commission rate?
It depends on the product and plan: single-digit percentages are common on high-value or high-volume sales, while plans paid on gross margin often use 10–30% of margin. Your plan document sets the rate.