Commission Calculator
Calculate sales commission from a flat rate or tiered structure. See commission amount, agent split, effective rate, and net to seller.
Free Commission Calculator for Sales & Real Estate
The SmarterSources Commission Calculator helps sales professionals, real estate agents, brokers, and business owners instantly determine commission earnings from any deal. Whether you use a flat rate or a tiered structure, this tool breaks down your total commission, your share after splits, the effective rate, and the net amount the seller keeps.
How Sales Commission Works
Commission is a performance-based payment calculated as a percentage of a sale. The formula is simple: Commission = Sale Price x Commission Rate. For example, a 6% commission on a $400,000 home sale equals $24,000. In many industries, this total commission is then split between multiple parties, such as a listing agent and a buyer's agent, or between a salesperson and their brokerage.
Tiered Commission Structures
Many organizations use tiered commissions to incentivize higher sales volumes. With a tiered structure, different commission rates apply to different portions of the sale amount. For instance, a company might pay 5% on the first $100,000 in revenue and 8% on everything above that. This rewards top performers while keeping costs manageable on base-level sales.
Real Estate vs. Sales Commissions
Real estate commissions in the U.S. typically range from 5% to 6% of the sale price and are usually split between listing and buyer agents. Sales commissions vary widely by industry: SaaS companies often pay 10-15%, insurance agents earn 5-20%, and retail commissions can range from 1-10%. Understanding your industry benchmark helps you negotiate better compensation.
Tips for Negotiating Commission
Commission rates are almost always negotiable. In real estate, sellers can negotiate lower rates on high-value properties or offer tiered incentives. Sales professionals should understand their company's commission plan, including accelerators, clawbacks, and split structures. When evaluating offers, look beyond the headline rate and consider the effective rate after tiers and splits.
Frequently Asked Questions
How is sales commission calculated?
Sales commission is calculated by multiplying the sale price or revenue by the commission rate. A 6% rate on a $500,000 sale produces $30,000 in commission. If split 50/50 between agents, each receives $15,000.
What is a tiered commission structure?
A tiered commission structure applies different rates to different portions of a sale. For example, 5% on the first $100,000 and 7% above that. This rewards higher-volume sales while maintaining a base rate on initial revenue.
What is the typical real estate commission rate?
Real estate commissions in the U.S. generally range from 5% to 6% of the sale price. This is typically split between the listing and buyer's agents. Rates are negotiable and can vary based on market conditions and property value.
What is the difference between commission rate and effective rate?
The commission rate is the stated percentage. The effective rate is the actual overall percentage paid when tiered brackets are applied. With tiers, the effective rate is typically lower than the highest tier rate because lower rates apply to earlier portions of the sale.
Is my data safe?
Yes. This calculator runs entirely in your browser. No data is sent to any server and nothing is stored.