Commission Income Calculator
Example: Base salary: 45000 $ · Total sales you generated: 500000 $ · Commission rate: 5 % · Sales threshold before commission: 100000 $
| Total income | $65,000 |
| Commission earned | $20,000 |
| Sales that earned commission | $400,000 |
Worked example
With a $45,000 base and a $100,000 sales threshold, only sales above that threshold earn commission. On $500,000 of total sales, $400,000 is commissionable. At a 5% rate, that is $20,000 in commission, bringing total income to $65,000. Notice that the first $100,000 of sales earned nothing extra — understanding where the threshold sits is critical to judging whether a plan is generous or stingy.
Frequently asked questions
What is a commission threshold or quota?
Many plans pay commission only on sales above a set floor, sometimes called a quota or draw threshold. Sales below it are considered covered by your base salary. Enter that floor here; if your plan pays commission from the very first dollar, set the threshold to zero.
How do I evaluate a commission-heavy offer?
Look at the on-target earnings — base plus commission at a realistic sales level — not just the uncapped potential. Ask what percentage of reps actually hit quota. A low base with a high theoretical ceiling can pay far less than a balanced plan if quotas are rarely met, so model a conservative sales figure here.
Does this handle tiered or accelerating commission?
This calculator uses a single flat rate above the threshold. If your plan accelerates — say 5% up to quota and 8% beyond — run it twice, once for each tier and rate with the appropriate thresholds, and add the commission portions together for your total.
Is commission income taxed differently?
Commission is ordinary income and taxed like your salary, though a large commission check may have extra withheld at the supplemental rate up front, which balances out at tax time. Set aside for taxes just as you would on base pay, and remember commission can push your annual income into a higher bracket.