Calculate flat or tiered sales commission, with splits and base salary.
A flat commission applies one rate to all sales. Tiered commission applies different rates to successive bands of sales revenue — similar to a progressive tax. The rate on each band is a marginal rate: only the sales within that tier are charged at that tier's rate. Your net commission depends on your split arrangement; if you share commissions with a co-agent or broker, the gross amount is divided accordingly before adding any base salary.
Flat commission
Commission = Sales × Rate
Tiered commission
Commission = Σ (sales in each tier × that tier's rate)
Tiered (or 'bracketed') commission applies progressively higher rates as sales increase. For example, 3% on the first $25k, 5% on $25k–$75k, and 8% above $75k. Only the sales within each tier are charged at that tier's rate — the higher rate does not apply retroactively to all sales. This incentivizes reps to exceed targets.
A split divides the gross commission between two or more parties. A 60/40 split on a $5,000 commission gives $3,000 to one party and $2,000 to the other. Real estate transactions commonly split commissions between the buyer's agent and seller's agent, and again between agents and their brokerages.
For flat commissions, yes. For tiered commissions, the effective rate (your total commission ÷ total sales) is always lower than your top tier rate, because only part of your sales reached that tier. The effective rate is useful for comparing total compensation across different structures.
Commission is ordinary income and taxed like a salary. If you receive a large commission as a lump sum, your employer may withhold at a supplemental rate (22% federal for amounts under $1M). Your actual tax depends on your total income and filing situation — consult a tax advisor for specifics.