Tiered Commission Calculator

How it is calculated

This tool has exactly two tiers, and each rate applies only to the slice of sales in its own bracket, not to the whole amount. tier 1 commission = min(sales, tier1_limit) × tier1_pct ÷ 100 and tier 2 commission = max(0, sales − tier1_limit) × tier2_pct ÷ 100. The total is their sum, in dollars. Sales and the tier-1 limit are amounts for the same period (month, quarter or year); the two rates are percentages between 0 and 100. Sales at or below the limit earn only tier 1, so tier 2 shows zero. A limit of zero means all sales earn the tier-2 rate. The tool does not require tier 2 to be higher than tier 1 and does not support a third bracket, accelerators on the whole amount or clawbacks. Empty or negative fields, or a rate above 100, give no result.

Common mistakes

• Applying the higher rate to all sales once the limit is crossed. In this structure, 8% applies only to the 30000 above the limit; a plan that pays 8% on everything is a different design and gives 6400 here.
• Entering the tier-1 limit as a cumulative target for a longer period than the sales figure covers, for example a yearly threshold against monthly sales.
• Typing rates as fractions (0.05, 0.08) rather than percent. They are read as 0.05% and 0.08%, and a rate above 100 gives no result.
• Expecting a third tier. The tool has only one threshold, so a plan with 5%, 7% and 10% brackets must be worked out in separate steps.
• Leaving the second rate empty when no higher bracket exists. An empty field gives no result; enter the same rate in both tiers instead.