How commission is calculated
The calculator multiplies the sale by the percentage, then adds an optional flat fee:
commission = sale × rate / 100 + flat fee
It then reports the Net to seller as sale − commission and the Effective rate as commission ÷ sale × 100 to two decimal places. The effective rate only differs from the typed rate when you use the flat fee. Figures show up to two decimals. It is one rate applied to the full sale amount, with no tiers, caps or thresholds.
Worked examples
A 10,000 sale at 5% earns 500, leaving 9,500. If the agreement also takes a 100 flat fee, commission becomes 600, net becomes 9,400 and the effective rate is 6.00%. On a small sale the flat fee bites harder: on 1,000 at 5% plus 100, the commission is 150, which is an effective 15%.
| Sale | Rate | Flat fee | Commission | Effective rate |
|---|---|---|---|---|
| 10,000 | 5% | 0 | 500 | 5.00% |
| 10,000 | 5% | 100 | 600 | 6.00% |
| 1,000 | 5% | 100 | 150 | 15.00% |
| 250,000 | 2.5% | 0 | 6,250 | 2.50% |
Tiered commission by hand
Plans that pay 5% on the first 10,000 and 7% above that cannot be entered in one go. Run each slice separately. On a 15,000 total, the first 10,000 earns 500 and the remaining 5,000 earns 350 at 7%, for 850 in all, which is an effective 5.67% on the whole amount. Add the results yourself, because the tool treats each run as an independent sale.
Points to check before you rely on the number
- What the rate is applied to. Some agreements calculate commission on gross sales, some on net of returns, and some on profit. Enter the figure your agreement names, not the sticker price.
- Who the net belongs to. The label says Net to seller, which suits a property or marketplace sale where an agent or platform takes a cut. If you are the salesperson, the Commission earned figure is your pay.
- Splits. A real-estate commission is usually split between agents and brokerages. The total shown here is before any split.
- Tax. Commission is generally taxable income, and the tool deducts nothing for it. The take-home pay calculator can estimate what is left.
To check a rate is correct, use the percentage calculator. If the commission is part of a product price, the profit margin calculator shows how much margin remains after paying it.