Should commission be paid on revenue or profit?

Profit-based plans protect margin because a rep who discounts also lowers their own payout. Revenue plans are simpler and better for standardised pricing.

Is commission taxable?

Yes. In the US it is supplemental wages subject to withholding; in Canada it is employment income subject to CPP/QPP, EI and income tax.

What is a typical commission rate?

Retail runs 2–5%, B2B services 5–15%, and pure-commission roles can reach 20–40% of gross profit.

Does the calculator handle tiers?

Run it once per tier and add the results, or use your blended average rate for a quick estimate.

Sales Commission Calculator

Work out commission owed on any deal or period.

This calculator works out what a salesperson earns on a deal or over a pay period. Enter the total sales amount and the commission rate, add a base salary if the role has one, and it returns the commission earned, the total compensation, and the effective rate on revenue.

It suits owners setting up a first commission plan, sales reps checking a payout before it lands, and agencies paying referral partners. Commission can be calculated on revenue or on gross profit — paying on profit protects you when reps discount to close, so the calculator lets you enter whichever base your plan uses.

Keep commission plans simple enough that the person selling can calculate their own payout in their head. Plans that need a spreadsheet tend to be argued about at month end. Enter the figures below to model a plan, and use the copy button to paste the numbers into an offer letter or a payroll note.

Your numbers

Sales amount (revenue or gross profit)

Commission rate

Base salary for the period (optional)

Commission earned

$3,150.00

🇺🇸 US · USD

Sales base: $45,000.00
Commission rate: 7.00%
Base pay: $3,000.00
Total compensation: $6,150.00
Total cost as % of sales: 13.67%

Estimates only. Results from this calculator are for general informational purposes and are not tax, legal, accounting or financial advice. Rates change and individual circumstances vary — confirm figures with the CRA, the IRS, your state or provincial authority, or a licensed professional before acting on them.

How it's calculated

Commission = Sales base × (Commission rate ÷ 100)
Total compensation = Commission + Base pay
Cost of sales team % = (Total compensation ÷ Sales base) × 100

Frequently asked questions

Should commission be paid on revenue or profit?: Profit-based plans protect margin because a rep who discounts also lowers their own payout. Revenue plans are simpler and better for standardised pricing.
Is commission taxable?: Yes. In the US it is supplemental wages subject to withholding; in Canada it is employment income subject to CPP/QPP, EI and income tax.
What is a typical commission rate?: Retail runs 2–5%, B2B services 5–15%, and pure-commission roles can reach 20–40% of gross profit.
Does the calculator handle tiers?: Run it once per tier and add the results, or use your blended average rate for a quick estimate.

Related calculators

Profit Margin CalculatorTurn revenue and cost into gross margin percentage.Hourly Rate CalculatorConvert a target salary into an hourly billing rate.Net Profit CalculatorRevenue minus every cost — the real bottom line.Customer Acquisition Cost (CAC) CalculatorFind what one new customer really costs to win.