Commission Calculator
Calculate your commission earnings from any sales figure. Supports flat rate, tiered, and split commission structures with annual projections.
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Commission Structures Guide
What's the key thing to understand about 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 revenue, common in subscription and SaaS sales rather than one-off transactions.
What do I need to know about 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, usually paid back from future commission if the deal falls through or the customer cancels within a set period — always check the clawback terms before relying on a draw.
What's the key thing to understand about 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 commission becomes genuinely discretionary income, and compare that figure against the base salary a fixed-salary role would offer.
What's the key thing to understand about 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 months can push you temporarily into a higher tax bracket via PAYE, which usually corrects itself over the tax year but can cause short-term cash-flow confusion.