Business
Commission Calculator
Calculate a sales commission on revenue or gross profit, including a base salary and tiered rate.
Result
Paying commission on revenue rewards volume; paying on gross profit rewards margin. If your reps have discounting authority, revenue-based commission quietly encourages them to use it.
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About this calculator
Should commission be on revenue or profit?
Profit, if the salesperson can influence price. It aligns their incentive with yours, on revenue-based commission, discounting to close costs them almost nothing and costs you a lot.
When should commission be paid?
On collection rather than on signing, wherever you can. It protects cash flow and gives the salesperson a stake in the customer actually paying.
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