Commission calculator does a very simple math for you - it calculates the percentage-based remuneration. As with any Omni calculators, it can calculate either way - start filling in any fields and you'll have the other ones calculated. Turn on the advanced mode and you'll see what happens to the base price when you either add or subtract the commission to/from it (depending on who covers the commission - the seller or the buyer).
This is a very basic calculation revolving around percents. Just take sale price, multiply it by the commission percentage, divide it by 100. An example calculation: a blue widget is sold for
$70. The sales person works on a commission - he/she gets
14% out of every transaction, which amounts to
So the formula is:
commission_amount = sale price * commission_percentage / 100.
So now you know how to calculate commission. Then there's a problem of who absorbs this cost - usually it's the selling party (whoever hired the sales person to do the job). To calculate their revenue, we need to use a percentage decrease calculation.
real_revenue = sale_price - sale_price * commission_percentage / 100. In our example, it's
$70 - $70 * 14 / 100 = $70 - $9.80 = $61.20.
It's not very common, but sometimes it's the buyer who pays for the sales person's remuneration. In those cases we need a percentage increase formula:
price_with_commission = base_price + base_price * commission_percentage / 100. In our example, it's
$70 + $70 * 14 / 100 = $70 + $9.80 = $79.80.
It's often the case that you need to calculate a margin along with the commission. A discount becomes a subject, too. The real estate commission calculator is a specific application of the problem (check out the VAT version, too).