# Commission Tier Payout Calculator

> Work out commission on a plan with any number of tiers, paid marginally like tax brackets or retroactively on all sales, with a tier-by-tier table.

Category: Salary, HR & payroll · Applies to: Worldwide · Last updated: 2026-10-29
Interactive calculator: https://calculators.geekmidst.com/calculators/commission-tier-payout-calculator

List each tier as the sales level where it starts and its rate. In a marginal plan each rate applies only to sales inside its tier; in a retroactive plan the top tier reached pays on every sale.

Also called: Commission accelerator calculator.

## Inputs
- Sales in the period (default 120000)
- Tiers (start level, rate %) (default 0, 4
50000, 6
100000, 9)
- How the rates apply (options: Marginal (per tier), Retroactive (all sales); default marginal)
- Base pay for the period (default 3000; optional)
- Currency

## Results
- Commission
- Total pay (base + commission)
- Effective commission rate
- Highest tier reached

## Formula

```
Marginal: Commission = Σ (sales inside tier k × rate k).  Retroactive: Commission = Sales × rate of the highest tier reached.  Effective rate = Commission ÷ Sales × 100
```

Where:
- Tier k: from its start level up to the next tier’s start
- rate k: commission rate for that tier

## Worked example
1. Tier 1: 50,000 × 4% = $2,000.
2. Tier 2: 50,000 × 6% = $3,000; tier 3: 20,000 × 9% = $1,800.
3. Commission = $6,800 (5.67% of sales); with $3,000 base, total pay is $9,800.

**Result:** 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.

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Source: GM¹X CalcVerse — https://calculators.geekmidst.com/calculators/commission-tier-payout-calculator