Commission Calculator
How much commission will I earn? Calculate flat-rate commission, tiered commission with multiple brackets, or total OTE compensation. Works with any currency.
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How to Use This Calculator
Tab "Basic Commission"
Enter your total sales amount and commission rate. The calculator multiplies them to show your gross commission earned. Use this for flat-rate commission plans where you earn the same percentage on every dollar.
Tab "Tiered Commission"
Enter your total sales and define three tiers with ceilings and rates. The calculator applies each rate only to the sales within that bracket, then sums them for total commission. It also shows the effective blended rate and a breakdown by tier.
Tab "OTE"
Enter your base salary, OTE (On-Target Earnings), quota, and actual sales. The calculator shows your total compensation, earned variable pay, quota attainment percentage, and how close you are to your OTE target.
The Formulas
Commission = Sales Amount × Commission Rate
Tiered commission:
Commission = Σ (Sales in Tier × Tier Rate)
Effective Rate = Total Commission / Total Sales
OTE compensation:
Variable Pay = OTE − Base Salary
Total Compensation = Base + Variable Pay × (Actual Sales / Quota)
All calculations are pre-tax. Commission structures vary by employer — accelerators, decelerators, caps, and clawbacks are not included in this universal model.
Worked Examples
Example 1 — Basic: $250K sales at 6%
A sales rep closes $250,000 in deals during the quarter with a flat 6% commission rate.
The rep earns $15,000 in gross commission before taxes.
Example 2 — Tiered: $150K across 3 tiers
A rep has a tiered plan: 5% on the first $50K, 8% on $50K–$100K, and 12% on everything above $100K. They close $150,000.
The tiered structure rewards higher sales with a progressively better rate. The blended effective rate of 8.33% is between the lowest (5%) and highest (12%) tiers.
Example 3 — OTE: $60K base, $120K OTE, 120% attainment
An account executive has a $60K base salary, $120K OTE, and a $500K annual quota. They close $600,000 (120% of quota).
By exceeding quota by 20%, the AE earns $132,000 total — $12,000 more than their on-target earnings. Many real plans include accelerators that pay even more above 100%.
Understanding Commission Structures
Flat-Rate Commission
The simplest model: one percentage on all sales. Common in real estate (5–6%), insurance, and retail. Easy to understand and predict, but offers no extra incentive for exceeding targets.
Tiered Commission
Different rates apply to different sales brackets, similar to progressive tax brackets. Higher tiers reward higher performance. This structure motivates reps to push past each threshold. The effective (blended) rate always falls between the lowest and highest tier rates.
OTE (On-Target Earnings)
OTE is the total compensation a salesperson expects to earn when hitting 100% of quota. It consists of a guaranteed base salary plus a variable component (commission). The split varies by role — SDRs might be 60/40 base-to-variable, while enterprise AEs might be 50/50.
Accelerators and Decelerators
Many OTE plans include accelerators that increase the commission rate above 100% attainment (e.g., 1.5x rate above quota) and decelerators that reduce it below a threshold (e.g., 0.5x rate below 50% attainment). This calculator uses a linear model — adjust manually for non-linear plans.
Limitations
This calculator assumes: (1) no caps on commission, (2) no clawbacks for cancelled deals, (3) linear payout for OTE (no accelerators/decelerators), (4) no draws or advances. Real commission plans may include any or all of these. Use the results as a baseline estimate.