Commission calculator

“3% up to 50,000, then 6%” has two meanings

This is the part worth getting right, because the two readings differ by real money and plenty of commission plans never say which one they mean.

Only the part above. The threshold works like an income tax band: the first $50,000 earns 3% and only the excess earns 6%. A $60,000 sale pays $1,500 + $600 = $2,100.

The whole sale. Crossing the threshold reprices everything, so the same $60,000 sale earns 6% throughout: $3,600.

One deal, $1,500 apart. The wording to look for in a plan document is whether the higher rate applies “on the excess” or “on the total”. When a plan is explained out loud as “you go up to 6% after 50k”, the whole-sale reading is usually what is being described and usually not what the document says.

The cliff, and why it matters at quarter end

Whole-sale tiers create a step. A deal one dollar under the threshold earns the lower rate on everything; one dollar over earns the higher rate on everything. At 3% and 6% around $50,000, that single dollar of sale is worth $1,500 of commission.

The tool works the step out and shows it whenever the whole-sale style is selected. It is the figure that decides whether a discount to close a deal is worth it, and the reason this style of plan produces a rush of sales that land just above the line.

Where the sale sits exactly on the threshold

A sale of exactly $50,000 against a $50,000 threshold is treated here as not having passed it, so it earns the lower rate. “Up to” and “over” have to meet somewhere and most plans do not say where. If yours does and it disagrees, the difference at that exact figure is the cliff shown above.

The commission is not what you take home

In estate agency, recruitment and most brokered sales the commission is earned by the firm and then split, so a 3% commission can reach the person who sold it as 1.5%. The panel keeps the two on separate lines for that reason: the commission, what the split takes, and what is left.

Other reasons a payment comes in under expectation: the commission is calculated on profit or on a net figure rather than the headline price, a cap has already been reached, or a clawback has been applied because a deal unwound.

Revenue or profit

Both kinds of plan exist. Commission on revenue rewards volume and is easy to check against an invoice. Commission on profit stops anyone discounting their way to a bonus, but it means the number your pay depends on is calculated by someone else, from costs you may not see. If yours works that way, enter the deal’s profit as the sale amount here rather than the invoice value.

What is not modelled

This prices one sale under one plan, before tax. Draws against future commission, clawbacks, caps, accelerators that reset each quarter, team overrides and split arrangements that vary by deal are all real and none of them are here. Use it to check a number or compare two plans. Your commission statement is the document that decides what you are owed.