Calculate commission from sales, commission rate and optional base pay. Work out commission earned, total earnings and the effective commission rate, or model a simple tiered commission structure.
Australian business calculator • Use the commission basis and rates stated in your agreement.
Calculate from eligible sales revenue or gross profit.
The sales amount used to calculate commission.
Compare actual sales with a target to evaluate quota attainment.
How marginal commission builds as sales cross each configured threshold.
At $10,000.00: marginal commission totals $0.00. A whole-sales arrangement at the attained rate would pay $300.00.
Solve backwards from a target commission amount and agreed rate.
Review how commission changes retained revenue and target progress.
A $1,000 sale with $600 cost of goods sold has $400 gross profit. A 5% revenue commission costs $50, leaving $350 contribution before overheads.
See how changes in rates and sales volume affect commission.
| Rate | Commission | Sales Retained |
|---|---|---|
| 2.00% | $200.00 | $9,800.00 |
| 3.00% | $300.00 | $9,700.00 |
| 5.00% (Current) | $500.00 | $9,500.00 |
| 7.50% | $750.00 | $9,250.00 |
| 10.00% | $1,000.00 | $9,000.00 |
| Volume | Sales | Commission |
|---|---|---|
| 50% | $5,000.00 | $250.00 |
| 75% | $7,500.00 | $375.00 |
| 100% | $10,000.00 | $500.00 |
| 125% | $12,500.00 | $625.00 |
| 150% | $15,000.00 | $750.00 |
Simple examples of common commission structures.
A consultant secures $20,000 in retainers at 6% commission.
$1,200 commission; $18,800 retained.A representative earns a $1,500 base plus 4% on $25,000 sales.
$1,000 commission; $2,500 total pay.$30,000 sales across 3%, 5% and 8% marginal tiers.
$1,600 commission; 5.33% effective rate.Your agreement should define whether commission is based on GST-inclusive or GST-exclusive amounts. Many businesses use GST-exclusive revenue because GST collected is not retained as business income.
Open GST CalculatorCommission, withholding, superannuation and minimum entitlement treatment can depend on the worker, award, contract and pay period. Verify the current rules that apply before relying on a pay calculation.
Common questions about Australian commission structures and calculations.
Multiply the eligible sales amount by the agreed commission rate. For example, $10,000 in eligible sales at 5% produces $500 commission. Your written agreement determines which sales qualify.
With marginal tiers, each rate applies only to sales within that bracket. With a whole-sales tier, reaching a threshold applies one rate to the full eligible sales amount.
The commission agreement should state the basis. Many businesses use GST-exclusive sales because GST collected is not retained as business revenue. Check the contract and obtain advice where needed.
Commission paid to an employee will generally form part of their employment earnings. Employers should apply the current withholding rules that fit the worker and payment circumstances.
Commission may form part of an employee's ordinary time earnings for superannuation purposes. The correct treatment depends on the arrangement and current rules, so verify it for the relevant pay period.
A written commission plan may include a clawback that adjusts later commission when a sale is refunded, cancelled or remains unpaid. The exact treatment should be set out clearly in the agreement.
Revenue commission uses eligible sales as its base. Gross-profit commission uses revenue less the direct cost of those sales, which can better protect margin when costs or discounts vary.
Commission-only employment is restricted in some industries and awards. Check the applicable award, minimum entitlements and employment terms before using this structure.
A draw is an advance against future commission. A recoverable draw is offset against later earnings, while a non-recoverable draw generally acts as a guaranteed payment floor.
Start with gross profit and contribution margin, then allow for overheads and the profit the business needs to retain. Test several rates before finalising an incentive plan.
Payroll tax treatment varies by state or territory and by the contractor arrangement. Check the relevant revenue office guidance or seek professional advice.
Pair commission modelling with pricing, GST and margin calculators.
See what remains after variable costs.
Calculate revenue less direct costs.
Check margin at an existing price.
Set a price that protects margin.
Separate Australian GST from billings.
Test how incentives affect break-even.
Check the contribution left after direct costs and commission.
General information only. These calculations are for illustrative business planning and do not constitute legal, employment, tax or financial advice. Check employment agreements, awards, contractor classifications and current obligations with an appropriately qualified adviser.