Sales Commission Tiers Calculator

Work out sales commission tiers instantly with clear inputs, formula shown and shareable results.

About Sales Commission Tiers Calculator

Tiered commission pays a base rate up to a threshold and an accelerated rate on everything above it. Because only the excess earns the higher rate, the blended rate rises gradually — which is the point: it rewards over-performance without repricing the whole book.

Formulas

Tiered commission

Commission = min(Sales, Threshold) x Rate 1 + max(0, Sales - Threshold) x Rate 2

Blended rate

Blended % = Total commission / Sales x 100

Worked example

With the default values below, Sales Commission Tiers Calculator returns Total commission earned of $13,200.00. Change any input above and every figure here is recalculated in your browser.

Inputs used

Sales achieved: 320,000
Tier 1 upper threshold: 200,000
Commission rate up to threshold: 3
Commission rate above threshold: 6

Results

Total commission earned: $13,200.00
Commission in tier 1: $6,000.00
Commission in tier 2: $7,200.00
Blended commission rate: 4.13%

Step by step

1Values used
2Tiered commission
3Blended rate
4Total commission earned= 13,200.00
5Commission in tier 1= 6,000.00
6Commission in tier 2= 7,200.00
7Blended commission rate= 4.13

Assumptions and limits

The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
In particular, this calculator does not take inflation, tax or compounding frequency into account.
Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

Is this the same as a cliff plan?

No. A cliff applies the higher rate retrospectively to all sales once the threshold is crossed, which creates a large jump and strong gaming incentives.

Should commission be on revenue or margin?

Margin-based commission aligns the seller with profitability and removes the incentive to discount, but needs margin data the seller can see and trust.