Calculate sales commission, commission rates, tiered payouts, real estate agent splits, base salary plus commission, and the sales needed to reach an earnings goal.
Commission Earned
Company Net Revenue
How Commission Calculator – Sales Commission, Tiered Pay & Real Estate Split Guide calculations work.
Multiply the commissionable sales amount by the commission rate expressed as a decimal. For example, $100,000 at 5% produces $5,000 in commission.
A 3% commission on $200,000 is $6,000 ($200,000 × 0.03 = $6,000).
Divide the commission by the sales amount and multiply by 100. For example, a $6,000 commission on $200,000 of sales equals 3% [($6,000 / $200,000) × 100 = 3%].
Divide the desired commission by the commission rate. For example, at 5%, earning $10,000 in commission requires $200,000 in sales ($10,000 / 0.05 = $200,000).
A progressive tiered commission applies different percentages to different portions of sales. For example, the first $20,000 might earn 3%, the next $5,000 5%, and amounts above $25,000 10%. The rates are not necessarily applied to the entire sales amount.
Not necessarily. That depends on the compensation agreement. In a progressive tier structure, 10% applies only to sales falling inside the 10% bracket. A different plan may award a higher rate to all qualifying sales after reaching a threshold.
Add the commission earned to the base salary: Total Compensation = Base Salary + Commission. This calculator separates those components so you can see both the variable commission and total modeled earnings.
At the simplest mathematical level, gross commission is property value multiplied by the applicable commission rate. The amount actually received by a particular agent can then depend on the transaction structure and contractual splits. Real-estate compensation is negotiable and is not set by law.
There is no universal commission percentage imposed by law. Compensation is negotiated between the relevant parties and can be structured in different ways.
A brokerage split determines how a particular agent's share is divided between the agent and brokerage under their agreement. A transaction may also involve separate listing-side and buyer-side compensation arrangements, so the exact calculation depends on the contracts and transaction structure.
For employees, commissions are generally wages subject to applicable employment taxes, and commissions can be treated as supplemental wages for federal income-tax withholding. Independent contractors have different tax and reporting rules.
No. The IRS's 22% rate can be an applicable federal income-tax withholding method for certain separately identified supplemental wage payments, but withholding is not necessarily the employee's final tax liability.
The effective commission rate is the actual total commission divided by total sales. It is especially useful for evaluating progressive commission plans where different portions of sales receive different rates.
At a 0% commission rate, percentage-based commission is $0 regardless of sales volume. A target-earnings calculation that requires positive commission cannot be reached through a 0% rate under the simplified model.
It can calculate the mathematical result of the assumptions you enter, but it cannot determine the legal or contractual terms of your transaction. Real-estate compensation can vary by agreement, transaction, brokerage, jurisdiction, and the services provided. NAR guidance states that broker compensation is negotiable and not set by law.