A tiered commission plan works the same way an income tax bracket does — each portion of a sale is paid at its own tier’s rate, not the whole sale at the top tier’s rate.
How it works
Flat mode simply multiplies the sale by one rate. Tiered mode splits the sale at a chosen ceiling: the portion up to the ceiling is paid at the first rate, and only the portion above it is paid at the second, higher rate.
What this does not include
Many real commission plans include accelerators, clawbacks for returned sales, or caps — this calculator covers the two most common structures (flat and two-tier) rather than every variation a specific plan might use.
How to use this calculator
- Enter the sale amount.
- Choose flat or tiered, and enter the applicable rate(s).
Frequently asked questions
Why isn’t a tiered plan just the top rate on the whole sale?
Because only the portion of the sale above the tier ceiling is paid at the higher rate — the same bracket logic that applies to progressive income tax, misapplying it overstates the commission on every tiered sale.
What’s the effective rate on a tiered sale?
The blended rate across both tiers — always somewhere between the two tier rates, closer to whichever tier holds the larger share of the sale.
Can I add more than two tiers?
Not directly in this calculator, though a three-tier plan can be approximated by treating the first two tiers’ blended result as a new starting point for a second pass.
