Commission calculator

How do I calculate commission?

Multiply the sales by the commission rate: $50,000 of sales at 5% earns $2,500. With a $2,000 base salary the total is $4,500.

How do I find the commission rate?

Divide the commission by the sales: $2,500 on $50,000 is 5%.

How is a real estate commission split?

The total commission is usually split between the buyer's and seller's agents and their brokerages by agreement — the calculator gives the total; divide it by the agreed shares.

Is commission taxed?

Commission is ordinary income. Employers often withhold tax on it as supplemental wages, so the check may look smaller than the gross amount here.

What about tiered commission?

Work out each tier separately — for example 5% on the first $50,000 and 7% above it — and add them up. On $80,000 of sales that is $2,500 plus $2,100, or $4,600.

How much tax is withheld from a commission check?

The IRS lists commissions among supplemental wages. If the employer pays the commission separately and uses the optional flat-rate method, federal income tax is withheld at 22%, or 37% on the part of an employee’s supplemental wages above $1,000,000 in the year. On $2,500 that is $550. Social Security (6.2%) and Medicare (1.45%) tax come out as well. The flat method is available only if income tax was withheld from regular wages. Withholding is not your final tax; it is settled on your return.

Is commission calculated on revenue or on profit?

That depends on your plan. The calculator multiplies whatever amount you enter by the rate, so enter the figure your plan uses: gross sales, sales net of returns, collected payments or gross profit. Read the plan for the exact base and for what happens to commission when an order is cancelled or refunded.

How commission is calculated

Commission = sales × rate ÷ 100, and total pay = commission + any base salary you enter. To go the other way, rate = commission ÷ sales × 100. The calculator also lists the commission at common rates from 2% to 20% for the same sales, so you can see what a different rate would pay. A flat rate is the simplest plan. In a tiered plan the rate changes at thresholds, and the amount in each tier is multiplied by that tier’s rate separately.

Worked example: $50,000 of sales at 5%

$50,000 × 5% = $2,500 of commission, and adding the $2,000 base gives $4,500 for the month. Suppose the commission is paid separately with the flat withholding rate: $2,500 × 22% = $550 of federal income tax, $155.00 of Social Security tax and $36.25 of Medicare tax, leaving $1,758.75 before any state or local tax. Under the tiered plan above, $80,000 of sales pays $4,600.

Common mistakes

Applying the higher tier rate to every dollar of sales is the usual tiered-plan error: unless the plan says the higher rate is retroactive, it applies only to the sales above the threshold. Typing the rate as 0.05 instead of 5 gives a commission a hundredth of the right size. Using the wrong base, such as revenue when the plan pays on profit or on collected payments, shifts every result. And reading the flat withholding rate as the tax you owe is a mistake: it is a withholding method, and your actual tax depends on your whole year’s income.

Sources: IRS, Publication 15 (2026), Employer’s Tax Guide: section 7, “Supplemental Wages” (commissions are listed as supplemental wages; the optional flat rate and the higher rate above $1 million in a calendar year) and the 2026 Social Security and Medicare rates and wage base in “What’s New.” Tiered plans are plain arithmetic on the plan’s own thresholds. For the net pay on a regular paycheck, use the paycheck calculator; for the tax on a bonus paid separately, the bonus tax calculator; to see what a pay change does to your salary, the raise calculator.

Estimates for planning only — not financial advice. Your lender's figures decide. How we check our calculators.