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
| Field | What to enter |
|---|---|
| Sale price | Amount in your currency |
| Commission rate | In % |
| Tier threshold (0 = no tiers) | Amount in your currency |
| Rate above the threshold | In % |
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 price | Commission |
|---|---|
| 2,500 | 200 |
| 3,750 | 300 |
| 5,000 | 400 |
| 6,250 | 500 |
| 7,500 | 600 |
| 10,000 | 800 |
Formula
Commission = sale price × rateTiered: rate 1 up to the threshold, rate 2 on the excessSeller keeps = price − commissionWorked 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 %.
Frequently asked questions
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.