# Commission Calculator

URL: https://speedycalculator.com/calculators/finance/commission/
Last updated: 2026-10-25

> The commission calculator works out a sales commission from the sale price and commission rate – or the rate from the amount – and what the seller keeps or the buyer pays, with optional tiered rates above a threshold.

## Inputs

- Sale price
- Commission rate (%)
- Tier threshold (0 = no tiers)
- Rate above the threshold (%)

## Results

- Commission
- Seller keeps
- Price including commission
- Effective rate

## Formula

```
Commission = sale price × rate
Tiered: rate 1 up to the threshold, rate 2 on the excess
Seller keeps = price − commission
```

## Explanation

Commission rates vary by industry: real estate agents 5–6% in total, car salespeople 20–30% of the dealer's profit, online marketplaces 5–15% of the sale. Tiered plans reward higher sales.

### How to use the Commission Calculator

- **Sale price**
- **Commission rate**
- **Tier threshold (0 = no tiers)**
- **Rate above the threshold**

Results update as you type, and every field accepts the units shown in its menu.

### How it works

Enter the sale price and commission rate, and optionally a threshold and a higher rate for sales above it.

### Tips

- Know the difference between margin (profit ÷ price) and markup (profit ÷ cost).
- Apply successive discounts one after another – they do not simply add up.
- Check whether prices already include sales tax or VAT.
- Round prices only at the very end of the calculation.

### Common mistakes to avoid

- Adding discount percentages together.
- Pricing from a target margin using the markup formula.
- Forgetting payment-processing and shipping fees.

### Inputs explained

FieldWhat to enterSale priceAmount in your currencyCommission rateIn %Tier threshold (0 = no tiers)Amount in your currencyRate above the thresholdIn %

### What each result means

- **Seller keeps** = [Sale price] - [Commission]
- **Price including commission** = [Sale price] + [Commission]
- **Effective rate** = [Commission]÷[Sale price]×100

### Example values

How the main result changes when **Sale price** changes and everything else stays at the example values above:

Sale priceCommission2,5002003,7503005,0004006,2505007,50060010,000800

## Worked example

Inputs — Sale price: $5,000; Commission rate: 8 %; Tier threshold (0 = no tiers): $0; Rate above the threshold: 12 %.

Results — **Commission = $400.00**; Seller keeps = $4,600.00; Price including commission = $5,400.00; Effective rate = 8 %.

## FAQ

**How is commission calculated?**
Sale price × commission rate.

**What is a tiered commission?**
A higher rate on sales above a target.

**Is commission taxable?**
Yes – commissions are ordinary income.

**What formula does the Commission Calculator use?**
Commission = sale price × rate.