How to calculate sales commission and total pay
When part of your pay comes from sales, it helps to separate the money you sold from the money you earned. We’ll use the commission rate to find what you earn on a sale, then work backward from a pay goal.
Multiply sales by the commission rate
Commission is the part of the selling price that a salesperson earns. Let be sales in dollars, be the commission rate as a decimal, and be the commission in dollars.
Suppose you earn on sales of wax warmers. If you sell 2,500 dollars of product, multiply the sales by .
You earned 625 dollars in commission.
Add commission to base pay
An employee earns 450.25 dollars in hourly pay and sells 3,500 dollars of merchandise at an commission rate. Find the commission first, then add it to the hourly pay to get the total before taxes.
The employee’s total pay is 730.25 dollars.
Work backward from a target paycheck
Stephanie earns 42,000 dollars per year plus a commission on car sales. To earn a total of 67,200 dollars, she needs the commission to make up the difference between her target pay and base salary.
Stephanie needs 168,000 dollars in car sales. Multiplying that amount by the rate gives 25,200 dollars, and adding her base salary brings her to 67,200 dollars.
Add commissions when the rates are different
A real estate agent earns on a 315,000 dollar sale, on a 225,000 dollar sale, and on a 410,000 dollar sale. Each rate applies to its own sale, so find the three commissions first.
The agent earns 43,050 dollars in total commission.
For another example of using a percentage to find a dollar amount, see how to calculate percent markup.
