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Commission Calculator

Created by Tibor Pál, PhD candidate and Mateusz Mucha
Reviewed by Bogna Szyk and Jack Bowater
Based on research by
Ingram, T.N. et al. Sales Management: Analysis and Decision Making, 9th Edition; 2015
Last updated: Jan 18, 2024


Commission calculator does a very simple calculation for you — it calculates the percentage-based remuneration. As with any Omni calculator, it can calculate either way — start filling in any fields, and the other ones will be calculated for you. There's nothing to worry about! The calculator will also show you 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).

Check our sales commission calculator to help you with that too!

How to calculate commission

This is a very basic calculation revolving around percentages. Just take the sale price, multiply it by the commission percentage, and divide it by 100. An example calculation: a blue widget is sold for $70. The salesperson works on a commission — they get 14% out of every transaction, which amounts to $9.80.

So the formula is:

commission amount = sale price × commission percentage / 100.

So now you know how to calculate commission. Now that you have this figure, there's a problem with who will cover this cost — usually, it's the selling party (whoever hired the salesperson to do the job). To calculate their revenue, we need to calculate the percentage decrease:

real revenue = sale price - sale price × commission percentage / 100. In our example, it's
$70 - $70 × 14 / 100 = $70 - $9.80 = $60.20.

It's not very common, but sometimes it's the buyer who pays for the salesperson's remuneration. In those cases, we need the 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 alongside the commission. You may also be offered a discount on your purchase (or you may offer one on a particularly hard sale). The real estate commission calculator is a specific application of this commission problem (check out the VAT version, too).

FAQ

What is a typical commission?

The typical commission depends on what is being sold. For manufactured goods, the commission rate tends to be around 7%-15% of the sale value. The commission on services tends to be much higher, being between 20%-50%. This is due to the overheads being generally lower. The average reported income in the USA for commission-based jobs is $66,805.

How do I calculate a 1% commission?

To calculate a 1% commission, you need to find 1% of the sale price:

  1. Divide the sale price by 100.
  2. Alternatively, move the decimal place of the sale price two places to the left.
  3. Either of these values is the 1% commission.

How do you work out commission?

To calculate a commission on a transaction, follow these steps:

  1. Take the sale price of the good or service.
  2. Divide it by 100.
  3. Multiply this new number by the commission as a percent.
  4. The product is your commission.

How do you calculate a 2% commission?

A 2% commission is just 2% of the sale price:

  1. Alternatively, move the decimal place of the sale price two places to the left.
  2. Double the result.
  3. Enjoy your 2% commission!
Tibor Pál, PhD candidate and Mateusz Mucha
Sale price
$
Commission
%
Commission amount
$
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