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Sales commission calculator
Commission is the sales (or gross profit) times the commission rate: 5% of $25,000 in sales is $1,250. Tiered plans pay each slice at its own rate, so with 8% to $10,000, 10% to $20,000 and 15% above, $25,000 pays $2,550. The calculator handles flat and tiered rates, commission on gross profit, a margin-based split, and a draw against commission, and adds a base salary to show total pay.
Updated October 12, 2026
Commission plans and their formulas
| Plan | How it pays | Example |
|---|---|---|
| Flat rate on sales | Sales x rate | $25,000 x 5% = $1,250 |
| Flat rate on gross profit | (Sales - cost of goods) x rate | ($25,000 - $18,000) x 20% = $1,400 |
| Tiered, each tier on its slice | Each slice of sales x that tier’s rate, added up | $10,000 x 8% + $10,000 x 10% + $5,000 x 15% = $2,550 |
| Tiered, top tier on everything | All sales x the rate of the highest tier reached | $25,000 x 15% = $3,750 |
| Margin split | Gross profit x the order’s gross margin, between a floor and a ceiling | 40% margin order: 40% of its gross profit |
The tier rates are Salesforce’s example plan. Check which tier method your plan uses: the two give very different pay at the same sales.
Paying on sales or on gross profit
Paying on sales is simple, and a PPAI (Promotional Products Association International) article by Randy Conley notes that most distributors’ plans reward reps for all sales regardless of profitability. The catch: a rep earns the same on a thin-margin order as on a healthy one, so discounting costs the company and not the rep. Paying on gross profit ties the rep’s pay to the margin they hold.
The margin split goes further. In the model PPAI describes, the rep’s share of gross profit equals the order’s gross margin, so a 40% margin order pays 40% of its gross profit. Distributors typically add a floor (PPAI cites 30% margin, below which nothing is paid) and a ceiling (50%, a 50/50 split on high-margin orders). Pick Margin split in the calculator to try it.
Draw against commission
A draw is an advance paid every period against the commission the rep will earn. With a recoverable draw, a short month leaves a balance the rep pays back from later commission. With a non-recoverable draw, the shortfall is forgiven.
| Draw | Commission earned | Paid | Carried forward | |
|---|---|---|---|---|
| Month 1 | $4,000 | $2,500 | $4,000 | $1,500 |
| Month 2 | $4,000 | $6,000 | $4,500 | $0 |
A recoverable $4,000 draw, from Advantage Club’s worked example: month 2 pays $6,000 minus the $1,500 owed. On a non-recoverable draw month 2 would pay the full $6,000.
Before you rely on the number
Use the plan document. It decides when a sale counts (booked, shipped, invoiced or paid), what cost is used for gross profit, and how returns are clawed back.
Agree on the cost. Commission on gross profit needs one agreed cost: standard, average or landed.
Check the period. Tiers usually reset each month, quarter or year; the calculator works on the sales you enter for one period.
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