Ladabo

Sales Commission Calculator

Total earnings from base pay plus commission, including an accelerator.

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Sales you must make before any commission is paid. Zero if you earn from the first sale.

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Set equal to your target. Sales above it earn the accelerated rate.

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Results update as you type. Nothing is sent anywhere.

Total earnings —
Commission —
At the standard rate —
At the accelerated rate —
Target attainment —
Effective rate on all sales — Commission per 100 of sales, all in.

How this is worked out

Most commission plans have three moving parts, and this works through them in order.

The threshold. Many plans pay nothing until you clear a floor. Sales below it earn no commission at all, so only what is above it counts:

commissionable = sales − threshold

The standard rate. Everything from the threshold up to target earns the ordinary rate.

The accelerator. Sales above target earn a higher rate, because the company has already covered its costs on your quota and wants the extra volume. This is where plans get interesting — the difference between hitting 95% and 105% of target is often far more than 10% of pay.

The effective rate at the bottom is the honest summary: commission divided by all your sales, including the part below the threshold that earned nothing. It is usually a lot lower than the headline rate, and it is the number to compare between job offers.

A worked example

Base 30,000, threshold 100,000, standard 5%, target 300,000, accelerator 8%. You sell 250,000:

  • Commissionable: 150,000, all at the standard rate
  • Commission: 7,500
  • Total: 37,500
  • Attainment: 83%
  • Effective rate on all sales: 3% — not the 5% on the plan

Now sell 350,000 instead:

  • 200,000 at 5% (from the threshold up to target) = 10,000
  • 50,000 at 8% (above target) = 4,000
  • Commission: 14,000, total 44,000

Selling 40% more than the first case earned 87% more commission. That is the accelerator doing its job, and it is why the last few weeks of a quarter matter so much more than the first few.

What this doesn't cover

  • This is one period. Plans with annual true-ups, clawbacks on cancelled deals, or quarterly resets need each period run separately.
  • Everything is before tax. Commission is often taxed at a higher withholding rate than salary in the month it is paid, then reconciled later.
  • Team overrides, split deals, product multipliers and drawn commission against advance are not modelled.
  • "OTE" — on-target earnings — means base plus commission at exactly 100% of target. Set sales equal to target to see yours.

Common questions

What is a threshold for?

It reserves a level of sales the employer considers already covered by your base pay. It is common and not unreasonable, but it changes the deal substantially — a 5% rate with a high threshold can pay less than a 3% rate with none. Always run both through the effective-rate line before comparing offers.

Is a higher base or a higher rate better?

It depends on how confident you are in the pipeline and how much variance you can absorb. A high base is certainty; a high rate is upside. What matters more than either is whether the target is realistic — a generous rate against a quota nobody has ever hit is worth very little.

How do I compare two pay plans?

Run each one three times: at the sales you are confident of, at target, and at a bad year. Comparing only the on-target number hides which plan protects you when things go wrong, and that is usually the difference that matters.

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