The Commission Calculator can compute any one of the following, given inputs for the remaining two: sales price, commission rate, or commission for a simple percentage commission structure.
This free sales commission calculator covers the most common payout scenarios US workers face: flat percentage commissions, graduated tiered rates, and revenue-split arrangements between reps and brokers. It works for roles ranging from retail sales associates earning 3–5% to enterprise software reps working 8–12% on net new contracts. Real estate professionals can model the traditional 5–6% listing commission and how it splits between buyer's and seller's agents under post-NAR-settlement structures. The results show gross commission, estimated federal tax withholding, and take-home pay — giving you a full-picture view with no extra math required.
1. Enter the total sale amount or transaction value in the "Sale Amount" field.
2. Select your commission type: flat rate, tiered, or split.
3. Input your commission rate as a percentage (e.g., 5 for 5%).
4. For tiered structures, add each tier threshold and its corresponding rate.
5. If your commission is split with a broker or team, enter the split percentage.
6. Click "Calculate" to see your gross commission and estimated after-tax take-home.
Flat-rate commission: Commission = Sale Amount × (Rate ÷ 100)
Tiered commission: Each tier's commission is calculated separately on the portion of the sale within that bracket, then summed. For example, if a plan pays 5% on the first $50,000 in sales and 8% on anything above, a $70,000 sale earns ($50,000 × 5%) + ($20,000 × 8%) = $2,500 + $1,600 = $4,100.
Split commission: After calculating gross commission, multiply by the rep's split percentage. A 60/40 split on a $4,100 gross commission returns $2,460 to the rep.
These calculations reflect gross earnings before withholding. After-tax estimates use current IRS 2026 tax brackets where applicable.
Your gross commission is the amount owed before taxes. What you actually deposit depends on how you're classified. W-2 employees have commission taxed as supplemental wages — the IRS mandates a 22% flat withholding rate on supplemental pay under $1 million, which your employer applies automatically. Independent contractors (1099) receive the full gross and owe self-employment tax of 15.3% on top of income tax, so setting aside 25–30% of every commission check is a practical rule of thumb.
The August 2024 NAR settlement reshaped how buyer's agent commissions work across the US. Sellers are no longer required to offer buyer-agent compensation through the MLS, though many still choose to. The practical effect: buyers increasingly negotiate their agent's fee directly, and total transaction commissions have edged down in some markets from the traditional 5–6% combined rate toward 4.5–5%.
For a $420,000 home sale — close to the 2026 US median — a 5% total commission is $21,000. If the listing broker and buyer's broker split that 50/50, each side earns $10,500 gross. A listing agent on a 70/30 split with their broker keeps $7,350. Plugging these numbers into the commission calculator before closing helps both agents and their brokerages reconcile expected payouts before settlement paperwork is signed.
Tiered (or "accelerated") commission plans are common in B2B software, insurance, and pharmaceutical sales. The goal is to reward overperformance: hit your base quota at one rate, then earn more per dollar on everything above it.
Here's a real example structure for a SaaS sales rep with a $500,000 annual quota:
A rep who closes $600,000 earns: ($400,000 × 7%) + ($100,000 × 9%) + ($100,000 × 12%) = $28,000 + $9,000 + $12,000 = $49,000 in commission for the year. Knowing these breakpoints in advance lets reps prioritize deal timing — closing a large contract in the final week of a quota period can shift you into a higher tier and substantially change your payout.
A "draw against commission" plan gives reps a guaranteed weekly or monthly advance — essentially a loan against future earnings. If your draw is $3,500/month and you earn $5,000 in commissions, you keep the $1,500 difference. If you earn only $2,800, you owe the $700 shortfall back (recoverable draw) or it's simply forgiven (non-recoverable draw).
Many new sales hires don't realize which type they've signed until they leave or miss quota for several months. Recoverable draw debt accumulates fast: three months at $700 per month = $2,100 owed at departure. Always clarify draw terms in writing before accepting an offer, and use the commission calculator to model realistic scenarios based on historical team performance data — not just the projections in the offer letter.
Tax treatment varies sharply based on employment classification:
W-2 employee: Commissions are supplemental wages. Federal withholding defaults to 22% flat on amounts under $1 million. Bonus FICA applies until you hit the 2026 Social Security wage base of $184,500. Your employer handles the withholding — no quarterly estimates required.
1099 contractor: You receive the full gross commission, but you owe both the employer and employee halves of FICA — a combined 15.3% self-employment tax on the first $184,500 of net self-employment income, plus income tax at your marginal rate. The 2026 standard deduction for single filers is $16,100, so a 1099 rep earning $80,000 net will owe roughly $11,249 in SE tax plus income tax on the remainder — a material difference from the W-2 case. Self-employed reps can deduct half of SE tax and business expenses, which lowers effective tax liability.
The base figure drives everything. Errors in the invoiced or closed amount directly distort commission payouts.
Rates vary widely — retail clerks may earn 2–5%, real estate agents typically 2.5–3% per side, enterprise sales reps often 8–12%.
With accelerated plans, knowing exactly where one tier ends and the next begins determines whether a rep pushes to close before or after quarter-end.
Broker splits, team splits, and overlay splits all reduce the rep's net. Always confirm whether the split is applied before or after expenses.
W-2 vs. 1099 status changes self-employment tax obligations substantially.
Many plans claw back commissions if a customer cancels within 90–180 days. Factor this risk into income projections.
Jordan is a pharmaceutical sales rep earning a flat 8% commission on net sales. In Q1, her territory generated $375,000 in sales. Her gross commission: $375,000 × 8% = $30,000. As a W-2 employee, her employer withholds 22% supplemental rate = $6,600 federal tax. Jordan's estimated federal take-home: $23,400, before state income tax.
Marcus lists a home for $485,000 at a total 4.8% commission ($23,280). The buyer's side takes 2.2% ($10,670) and his side gets 2.6% ($12,610). Marcus is on a 75/25 split with his broker, so his net: $12,610 × 75% = $9,458 gross to Marcus. Texas has no state income tax, so his federal obligation applies only. As a 1099 contractor, he estimates setting aside 28% for federal self-employment and income taxes — about $2,648 — leaving roughly $6,810 in take-home on that transaction.
1. Track each deal's commission in a spreadsheet before relying on your paycheck. Payroll errors in commission-heavy roles are more common than most reps expect.
2. Ask for your comp plan in writing and confirm whether your draw is recoverable or non-recoverable before your first paycheck.
3. Model your tier breakpoints at quota time — sometimes it's worth delaying a closing to push into the next month when you'll hit a higher accelerator.
4. As a 1099 contractor, pay estimated quarterly taxes by the IRS deadlines (April, June, September, January) to avoid underpayment penalties.
5. Understand charge-back windows — an 8% commission on a $50,000 deal looks great until the client cancels at 60 days and you return $4,000.
6. Negotiate split percentages at hire — most brokerages and sales orgs have flexibility, especially for experienced reps with a proven track record.
A: Multiply $200,000 by 0.05 (or 5 ÷ 100). The result is $10,000 gross commission. If you share a 60/40 split with a broker, your portion is $6,000.
A: Rates depend heavily on industry. Retail sales roles typically pay 2–5%, real estate agents earn 2.5–3% per side of a transaction, and B2B software reps often earn 8–12% of net new contract value.
A: Commission income for W-2 employees is classified as supplemental wages. The IRS default flat withholding rate is 22% for amounts under $1 million per year, though your overall effective rate depends on your total annual income.
A: Yes. Independent contractors owe self-employment tax of 15.3% (12.4% Social Security + 2.9% Medicare) on net self-employment income up to the 2026 wage base of $184,500, plus income tax at your marginal rate.
A: As of August 2024, sellers are no longer required to offer buyer-agent compensation through MLS listings. Buyers can negotiate agent compensation directly, and total transaction commissions have decreased in many markets as a result.
A: It's a guaranteed pay advance deducted from future earned commissions. A recoverable draw must be repaid if commissions don't cover it; a non-recoverable draw is forgiven. The distinction matters enormously at job departure.
A: Different rates apply to different revenue segments. A plan might pay 7% on quota attainment up to 80%, then 9% up to 100%, then 12% on overperformance. Each tier's commission is calculated on just the portion of sales falling within that bracket.
A: Yes, most commission plans include charge-back clauses allowing recovery of previously paid commissions if a customer cancels or defaults within a defined window — typically 90 to 180 days from sale.
Brief disclaimer: This calculator provides estimates for educational and planning purposes only. Actual commission payouts, tax withholding, and take-home pay depend on your specific comp plan, employment classification, and applicable tax laws. Results should be treated as planning guidance rather than financial, tax, or legal advice.