How much commission did that sale earn?

Flat vs. tiered commission structures?

A flat commission pays the same rate on every dollar of a sale — simple to calculate and predict. A tiered commission pays a base rate up to a set threshold and a different, usually higher, rate on the portion above it, rewarding higher sales volumes with a better effective rate on the top slice of a big deal. Toggle "Tiered commission" above to see both structures applied to the same sale amount.

How is commission usually calculated on a sale?

Most commonly it's a percentage of the sale price or gross revenue, which is what this calculator assumes. Some structures instead use gross profit (sale price minus cost of goods) as the base, especially in industries with highly variable margins like used cars or wholesale goods, where basing commission on the top-line price could reward a low-margin deal as much as a high-margin one. Confirm which base your specific commission plan uses, since it changes the payout meaningfully.

Is commission taxed differently than salary?

In the US, commission is often withheld at a flat supplemental wage rate rather than regular payroll withholding tables, though it's still ordinary taxable income once you file your return. The withholding mechanics can differ from your base salary, but your ultimate tax liability is calculated the same way as any other earned income — see the Salary Calculator for a broader take-home pay estimate.

What's a typical commission rate?

Rates vary enormously by industry — from under 1% on some high-ticket real estate or wholesale transactions to 20%+ in certain direct sales or insurance roles — so there's no single universal figure to benchmark against. Check the norm for your specific industry and role rather than assuming a standard rate applies broadly.

Worked example: a $25,000 sale at a flat 5% rate earns $25,000 × 5% = $1,250.00. Under a tiered structure with a $10,000 threshold at 5% and 8% above it: commission = $10,000 × 5% + ($25,000 − $10,000) × 8% = $500 + $1,200 = $1,700.00 — $450 more than the flat-rate payout on the same sale.