How to use the Commission Calculator
- Choose flat or tiered commission and enter the sales amount.
- Enter the rate (or slab limits and rates).
- Optionally add fixed pay and the TDS rate that applies to the payee.
Formula
Flat: Commission = Sales × Rate ÷ 100
Tiered: sum of (sales within each slab × that slab's rate)
Payout = Fixed pay + Commission − TDS
How tiered (slab) commission works
In a marginal slab structure, each rate applies only to sales within its slab — like income-tax slabs. With 2% up to ₹1 lakh, 4% from ₹1–3 lakh and 6% above, sales of ₹5 lakh earn ₹2,000 + ₹8,000 + ₹12,000 = ₹22,000, not 6% of the whole ₹5 lakh.
Worked examples
5% on ₹2,50,000 sales
- 2,50,000 × 5 ÷ 100 = ₹12,500
Commission ₹12,500
Tiered: 2% to ₹1 lakh, 4% to ₹3 lakh, 6% above; sales ₹5 lakh
- 1,00,000 × 2% = ₹2,000
- 2,00,000 × 4% = ₹8,000
- 2,00,000 × 6% = ₹12,000
Commission ₹22,000
Important notes
- TDS on commission depends on the payee and the law in force, so enter the rate yourself rather than relying on a default.
Frequently asked questions
Is commission calculated on sales including GST?
Usually on the taxable value (excluding GST), but follow the terms of your agreement.
What is the difference between tiered and retroactive commission?
Tiered (marginal) rates apply only to sales in each slab. Retroactive plans apply the highest reached rate to all sales. This calculator uses the marginal method.