A worked example
A $50,000 sale, paying 5% on the first $20,000 and 8% on everything above it, earns $1,000 from the first tier and $2,400 from the second — a total of $3,400.
Frequently asked questions
How does a tiered commission actually work?
Only the portion of the sale above the threshold earns the higher rate — the first chunk still earns the base rate. It works the same way income tax brackets do: each tier applies only to its own slice of the total.
How do I model a simple flat-rate commission instead?
Set both rate fields to the same percentage — the threshold becomes irrelevant since every dollar earns the same rate either way.
This calculator provides general estimates only. Actual commission structures and payout terms depend on your specific employer agreement.