Tiered Sales Commission Calculator
Calculate commission earned under a two-tier commission structure with a threshold.
About this calculator
Tiered commission plans, where sales up to a threshold earn one rate and everything above it earns a higher bonus rate, are common in sales compensation but genuinely tricky to compute by hand, because it's tempting (and wrong) to apply the bonus rate to the whole sales total instead of just the portion above the threshold. This calculator applies the base rate to sales up to the threshold and the bonus rate only to the amount exceeding it, using min(Sales, Threshold) × Base rate plus max(0, Sales − Threshold) × Bonus rate, then sums the two for total commission. It's built for sales reps checking their own commission statement, sales managers structuring or explaining a compensation plan, or finance teams verifying payroll commission calculations. The threshold logic is exactly where manual calculations go wrong, someone applies the higher rate to the entire sales figure instead of just the excess, which can overstate commission substantially on larger deals.
Worked example
$50,000 sales, $30,000 threshold, 5%/8%
Result: $3,100.00
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