How to Calculate Commission: Flat, Tiered, and Base Pay

Calculate sales commission for flat rates, tiered bands, base plus commission, and draws, with worked dollar examples.

Updated 3 min read By CodingEagles
Free tool Commission Calculator Flat, tiered, base-plus and reverse sales commission. Open tool

For a flat plan, commission equals the sale amount multiplied by the commission rate.

TL;DR: Use the commission calculator to handle flat, tiered, and base-plus plans. A $2,000 sale at 15% pays $300.

Flat commission

The simplest case is one rate on the whole sale. A $2,000 sale at a 15% rate pays $2,000 × 0.15 = $300. If you want to work backward from a known payout, divide the commission by the rate. A $300 commission at 15% means a $2,000 sale.

Tiered, base, and draw plans

Tiered plans split sales into bands, and each band has its own rate. Say you sold $27,000 across three marginal tiers: 3% on the first $10,000, 5% on the next $10,000, and 10% on the rest. The first band pays $300, the second pays $500, and the last $7,000 at 10% pays $700. Add them up and you earn $1,050. Only the dollars inside each band get that band’s rate.

Base plus commission adds a fixed salary to your commission. If your base is $1,000 for the period and you earned $1,050 in commission, your total is $2,050.

A draw against commission is an advance. The company pays you, say, $1,500 up front, then subtracts it from your earned commission. With $1,050 earned against a $1,500 recoverable draw, you carry a $450 shortfall into the next period.

Plug your own bands and rates into the commission calculator to see the full payout in one pass.

Frequently asked questions

How does tiered commission work?
Each portion of sales falls into a band with its own rate, and only the amount inside that band earns that rate. The first slice might earn 3%, the next 5%, and the top 10%. You add the results from each band to get total commission.
What is a draw against commission?
A draw is an advance the company pays you before commissions are earned. When your commission comes in, the draw is subtracted first. If you earn less than the draw, you may owe the difference back, depending on whether it is a recoverable draw.

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