How to use this calculator
- Enter or choose sales in the period.
- Enter or choose tiers (start level, rate %).
- Enter or choose how the rates apply.
- Enter or choose base pay for the period.
- The commission updates as you type. Use Copy result or Share to keep it.
Method
Marginal: Commission = Σ (sales inside tier k × rate k). Retroactive: Commission = Sales × rate of the highest tier reached. Effective rate = Commission ÷ Sales × 100
- Tier k
- from its start level up to the next tier’s start
- rate k
- commission rate for that tier
Worked example
- Tier 1: 50,000 × 4% = $2,000.
- Tier 2: 50,000 × 6% = $3,000; tier 3: 20,000 × 9% = $1,800.
- Commission = $6,800 (5.67% of sales); with $3,000 base, total pay is $9,800.
On $120,000 of sales the marginal plan pays $6,800 commission; a retroactive plan with the same tiers would pay 9% on everything, $10,800.
What the result means
Retroactive plans create a cliff: one more sale that crosses a threshold can raise pay sharply, which strongly motivates closing deals at period end. Marginal plans pay smoothly.
Assumptions and limits
- Commission is paid on the sales figure you enter (revenue, margin or bookings, depending on your plan).
- A tier is reached when sales are at or above its start level.
- Caps, draws, clawbacks, split credit and quota-based multipliers are not modelled.
Questions
How is this different from the simple commission calculator?
It handles any number of tiers and lets you choose between marginal and retroactive payout. For a flat rate or two tiers, the Commission Calculator is quicker.
What is an accelerator?
A higher rate that kicks in after a target is met, usually 100% of quota. Enter the quota as the start of the accelerated tier.