Commission Calculator

How sales commission is calculated

A flat commission pays a fixed percentage of sales: commission = sales × rate. A salesperson with ₹2,50,000 of sales at 5% earns ₹12,500.

Many companies pay a base salary plus commission, so total pay = base + sales × rate. With a ₹25,000 base, the same month pays ₹37,500.

Tiered and threshold plans

Tiered plans pay a higher rate only on the portion of sales above a threshold, similar to tax slabs. Under a plan of 5% on the first ₹2,00,000 and 8% above that, ₹2,50,000 of sales earns 0.05 × 2,00,000 + 0.08 × 50,000 = ₹10,000 + ₹4,000 = ₹14,000. A common mistake is applying 8% to the whole amount, which would wrongly give ₹20,000.

Some plans pay nothing until a quota is reached, and some calculate commission on gross profit rather than revenue, which protects the business when discounts are large. Always confirm which base, rate and threshold your contract uses.

Practical checks

Commission is normally taxable as part of salary income. Returns, cancelled orders and clawbacks can reduce commission in a later month, so keep your own record of each sale. When comparing job offers, multiply a realistic monthly sales figure by each plan's rules rather than comparing headline percentages.