Work out sales commission tiers instantly with clear inputs, formula shown and shareable results.
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.
Tiered commission
Commission = min(Sales, Threshold) x Rate 1 + max(0, Sales - Threshold) x Rate 2
Blended rate
Blended % = Total commission / Sales x 100
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.
Margin-based commission aligns the seller with profitability and removes the incentive to discount, but needs margin data the seller can see and trust.