Sales Commission Calculator
Commission on sales with an optional accelerator above a threshold, plus total pay when there is a base salary.
- Free, no sign-up
- Runs in your browser, nothing is stored
- Formula and worked example included
Sales Commission Calculator
Enter your figures to see results.
How much commission will I earn or pay?
Commission is a percentage of what is sold, sometimes with a higher rate once sales pass a target. On £85,000 of sales at 5%, with 8% above £60,000, the commission is £5,000, about 5.9% overall. Add the basic salary for the period and you have total pay before tax.
How to use this calculator
- Enter sales for the period and the commission rate.
- If the plan pays more above a target, enter the threshold and the higher rate.
- Add the base salary for the same period to see total pay and how much of it is variable.
What your result means
How to read the figure, what counts as normal, and what to do about it.
How commission plans are built
The simplest plan pays a flat percentage of everything sold. Most plans add a structure on top: a threshold or quota below which little or nothing is paid, an accelerator that pays a higher rate on sales above target, and sometimes a cap. This calculator handles flat and two-tier plans, which cover the majority of UK small-business arrangements.
In the UK, commission is earnings: it is subject to PAYE income tax and National Insurance, counts towards holiday pay calculations under the Employment Rights Act, and once it is contractual it cannot be withdrawn without agreement.
Designing a plan that works for both sides
- Pay on what you want more of. Commission on revenue encourages discounting; commission on gross profit does not.
- Keep the on-target earnings realistic. A common structure is 60–70% base, 30–40% variable at target, with accelerators making top performers noticeably better off.
- Make the maths checkable. If a salesperson cannot work out their own commission in a minute, the plan is not motivating anyone.
- Define the trigger. Order signed, invoice raised or cash received, and what happens on cancellations and bad debt (clawback).
- Put it in writing. The plan, the period, the payment date and the clawback terms belong in the contract or a signed schedule.
Worked example: a field sales rep
The rep is paid £2,500 a month basic, plus 5% on sales up to £60,000 and 8% on anything above. This month she sold £85,000.
Commission = 60,000 × 5% + 25,000 × 8% = 3,000 + 2,000 = £5,000.
Effective rate = 5,000 ÷ 85,000 = 5.9%. Total pay = 2,500 + 5,000 = £7,500, of which two-thirds is variable: a plan that rewards a strong month heavily.
Frequently asked questions
Is commission taxed differently from salary in the UK?
No. It is taxed through PAYE like any other pay. Because it is often paid in lumps it can push a month into a higher band, which evens out over the tax year.
Does commission count towards holiday pay?
Yes. Regular commission that is intrinsically linked to the job must be reflected in holiday pay for the first four weeks of statutory leave, normally using a 52-week average of earnings.
What is a typical commission rate?
It depends entirely on margin and deal size: 5–10% of revenue is common in B2B services, 1–3% in high-value goods such as vehicles or property, and 20–30% of gross profit where profit-based plans are used.
Can I claw back commission if a customer cancels?
Only if the contract says so clearly. Clawback terms should state the trigger, the time limit and how the deduction is made so that it complies with the rules on unlawful deductions from wages.
The maths behind this calculator
For anyone who wants to check the working or rebuild it in a spreadsheet.
The formula
Flat plan: Commission = Sales × Rate
Tiered plan: Commission = min(Sales, Threshold) × Rate
+ max(Sales − Threshold, 0) × Accelerator rate
Effective rate = Commission ÷ Sales × 100
Total pay = Base salary + Commission Assumptions and limits
- Commission is calculated on the sales figure you enter; whether that is revenue, gross profit or margin is set by your plan.
- Figures are gross of tax and National Insurance. Use the salary calculator to see the employee's take-home.
- Where no accelerator rate is entered, sales above the threshold are paid at the base rate.
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