Sales Commission Calculator

Commission structures change rep behaviour. Flat-rate is simple but doesn't reward growth. Tiered creates threshold-jumping at boundaries. Graduated (marginal) is fairer but harder to explain. Profit-based aligns reps to margin. Team pools encourage collaboration. Pick the one that matches the behaviour you want.

How each structure pays

Each structure has its own payout formula:

Flat: Sales × Rate% | Tiered: Sales × (rate of the highest threshold hit) | Graduated: sum of each slice × its rate | Profit-based: (Sales − Cost) × Rate% | Team: pool ÷ split (leader gets share%, members share the rest equally)

Worked example

Rep sells 200,000 SAR this month with the default tiers (0→3%, 50k→5%, 150k→8%, 300k→10%). Graduated structure:

1. 0 to 50,000 SAR at 3% = 1,500 SAR
2. 50,000 to 150,000 SAR at 5% = 5,000 SAR
3. 150,000 to 200,000 SAR at 8% = 4,000 SAR
4. Total commission = 10,500 SAR
5. Effective rate = 10,500 ÷ 200,000 = 5.25%
6. Same sales under tiered (winner-takes-all) would pay 8% on all 200k = 16,000 SAR

Practical tips

• Tiered (cliff) commission causes month-end behaviour spikes — reps push to cross thresholds.
• Graduated is the industry default for mature teams; it removes the cliff incentive.
• Profit-based forces reps to defend margin — best when discounts are within their authority.
• Team pools work when individual attribution is messy (long enterprise cycles).
• Cap accelerators or model the upside before promising — runaway commissions can crater the P&L.