Commission Calculator

Commission Structures Guide

Commission Structure Types

Straight commission: earnings = sales × commission rate. No base salary, maximum incentive. Common in real estate, car sales, and some financial services. Base plus commission: projected income plus commission earnings. Most common structure — provides security while maintaining incentive. Tiered commission: rate increases at higher sales levels (e.g. 5% up to £30,000, 8% above — the accelerator). Quota-based: commission only paid on sales above a quota. Revenue share: percentage of recurring re

Accelerator and Clawback Provisions

Accelerators: higher commission rates above quota reward overperformance. Common in tech sales — 5% below target, 8% above. This dramatically increases earnings for top performers. Clawback provisions: commission can be reclaimed if a customer cancels or does not pay within a specified period. Common in financial services and subscription sales. This aligns sales incentives with actual customer value rather than just signed contracts. Draw against commission: an advance on expected commissions,

Negotiating Commission Structures

When evaluating a commission role: focus on the on-target earnings (OTE) — the total expected earnings if you hit 100% of target. Check what percentage of the sales team actually hits target — if only 20% achieve OTE, the OTE is misleading. Understand the quota-setting process — aggressive quota inflation destroys earnings. Look for accelerators above 100% of target — they reveal whether the company rewards top performers. Calculate break-even: what sales level covers your cost of living before

Tax on Commission

Commission is taxable income, treated the same as salary for PAYE purposes. Your employer should deduct income tax and National Insurance via PAYE. If commission pushes you into a higher tax bracket, be aware of the marginal rate on the additional income. For self-employed agents earning commission, declare all earnings on self-assessment. Business development allowances (client entertaining, home office if working remotely) may be deductible — keep receipts and records. Irregular commission mon