SALES COMMISSION
How sales commission works
Commission is a percentage of sales. The amount you receive can be reduced by a split, then added to your base pay.
FORMULA
Sales commission formula
Multiply the sales amount by the commission rate. Use the rate as a decimal when you work it out by hand.
EXAMPLE
$50,000 in sales at 6%
The gross commission is $3,000. With a $2,000 base pay and no split, total pay for the period is $5,000.
- Gross commission
- $3,000
- Base pay
- $2,000
- Total pay
- $5,000
SPLITS AND TARGETS
Use the rate you actually keep.
If you keep 50% of a 6% commission, your effective rate is 3%. To earn $1,500, you need $50,000 in sales.
Gross commissionSales × rate
Your commissionGross commission × your share
Sales neededTarget commission ÷ effective rate
QUESTIONS
Commission questions
How do you calculate sales commission?
Multiply the sales amount by the commission rate. A $50,000 sale at 6% pays $3,000 in gross commission.
What is gross commission?
Gross commission is the full commission before any split with a broker, agency, teammate, or other party.
How do commission splits work?
Multiply gross commission by the percentage you keep. If a $3,000 commission is split 50/50, your share is $1,500.
How do I calculate total pay with commission?
Add your base pay to the commission you keep. If your base pay is $2,000 and your commission is $1,500, total pay is $3,500.
How much do I need to sell to reach a commission target?
Divide the commission you need by your commission rate after any split. At a 5% rate with no split, earning $2,500 requires $50,000 in sales.