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Sales commission calculator
Your sales commission is your commissionable sales multiplied by your commission rate. On $250,000 of sales at a 10% rate, you earn $25,000.
Formula
Commission = Commissionable sales × Commission rate
Example
You close $250,000 in commissionable sales this quarter on a 10% plan.
$250,000 × 10% = $25,000 in commission. One more $50,000 deal adds $5,000.
What counts as commissionable sales
Commissionable sales is the amount your plan pays on, which is often not the same as the deal's headline price. Depending on the plan it can be total contract value, first-year contract value, annual recurring revenue, net revenue after discounts, or gross margin. Read the definition in your plan before you trust any number.
Common questions
Is commission calculated on revenue or profit?
Both exist. Most sales plans pay on revenue or contract value, but some pay on gross profit or margin instead. On a margin plan, a $100,000 deal with 30% margin and a 20% rate pays $100,000 × 30% × 20% = $6,000.
When is sales commission paid?
Your plan sets the trigger. Common ones are when the contract is signed, when the customer is invoiced, or when the customer pays. Payment is usually monthly or quarterly after that trigger.
Can my commission be taken back?
Many plans include a clawback: if a customer cancels or doesn't pay within a set window, commission already paid on that deal is recovered from future payouts.
Is there a cap on commission?
Some plans cap total commission or cap payout on a single large deal, sometimes at management's discretion. Others are uncapped. Look for words like cap, windfall or maximum in your plan.
How is commission taxed?
In the US, commission is taxed as ordinary income. Employers often withhold federal tax on it at a flat supplemental-wage rate, so the withholding can look different from your regular paycheck even though the final tax owed is the same.
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