Calculate sales commissions, bonuses, and total compensation. Free commission calculator for sales teams and small businesses.
Calculate sales commissions, bonuses, and total compensation. Free commission calculator for sales teams and small businesses.
Generated: 1/13/2026, 5:11:04 AM | AskSMB.io
Sales revenue generated
Percentage paid to sales rep
Fixed pay in addition to commission
Minimum sales to qualify for bonus
Extra commission rate above threshold
Enter sales amount and commission rate to see results
A sales commission is performance-based compensation paid to salespeople based on the revenue they generate. It's typically calculated as a percentage of sales, aligning the salesperson's earnings with their contribution to the company. Commission structures motivate sales teams to close more deals and can include base salary plus commission, commission-only, or tiered structures with bonuses.
The most common structures are: (1) Straight commission - 100% variable pay based on sales, high risk/reward, (2) Base salary + commission - fixed salary plus percentage of sales, provides stability, (3) Tiered commission - higher rates for exceeding targets, (4) Gross margin commission - percentage of profit instead of revenue, encourages profitable sales, (5) Draw against commission - advance on future commissions, helps with cash flow.
Commission rates directly impact sales motivation and behavior. Higher rates drive more aggressive selling but increase costs. Lower rates save money but may demotivate top performers. Industry standards matter - rates too far below market lose talent. The key is finding the sweet spot where salespeople earn well when the company succeeds, creating a win-win alignment of interests.
Bonus thresholds create stretch goals beyond base expectations. They reward exceptional performance without inflating base commission rates. For example, offering an extra 2-3% on sales above quota incentivizes pushing for that next deal. SPIFFs (Sales Performance Incentive Funds) can also drive short-term behavior like clearing inventory or promoting new products. Ensure bonuses are achievable - unrealistic targets demotivate.
A fair commission plan should be: simple enough to calculate mentally, transparent with clear rules, achievable for average performers while rewarding top ones, paid promptly (monthly or quarterly), and aligned with business goals like profit margin and customer retention, not just revenue. Test your plan with scenarios before implementing. Get input from your sales team and adjust based on real-world results.
Where:
Standard commission = $50,000 × 5% = $2,500 | Bonus sales = $50,000 - $40,000 = $10,000 | Bonus commission = $10,000 × 3% = $300 | Total commission = $2,500 + $300 = $2,800