The Commission Formula
Commission = Total Sales × Commission Rate
Total Earnings = Base Salary + Commission
Common Commission Structures
- Straight commission: Earnings are 100% commission-based, with no base salary
- Base + commission: A guaranteed base salary plus commission on sales, common in many sales roles
- Tiered commission: Commission rate increases at higher sales thresholds (this calculator uses a flat rate — for tiered structures, calculate each tier separately and sum them)
Why Commission Structures Vary
Companies balance the security of a base salary against the motivational power of commission-based pay differently depending on sales cycle length, deal complexity, and industry norms.