Sales Commission Calculator

Sales Commission is a standard way of compensating salespeople in most businesses. It is based on the performance of the salesperson and dynamically calculated for each member of the sales team. This Sales Commission Calculator will help you determine the commission amount generated by sales in a quick and easy way.

Revenue Commission

Total Sales

Commission

Commission amount 0

Salespeople receive a pre-defined percentage of all the sales they make. For example, if you sell $50,000 in revenue while working with a company that pays out 5% of revenue, your commission will be $2,500.

Placement Fees

Number of sales transactions

Placement fee

Commission amount 0

In this type of commission structure, a salesperson receives a set amount of commission for each unit sold. For example, if you are paid $500 for each car you sell, that $500 is considered a placement fee. So, if you sell 10 cars in a month, you’ll receive $5,000.

Tiered Commission

The tiered commission plan is structured so that the more you sell, the more you earn per sale. It also provides sales employees with additional incentive to sell new products, upgrades to existing products, and to stay in contact with potential repeat customers.

For example, for sales of up to $15,000, the sales staff receive a commission of 8%. For sales between $15,001 and $25,000, sales staff receive a commission of 10%. For sales between $25,001, and $50,000, they receive 12%, and so forth. So, if total sales are $19,000, the salesperson will receive $1,600 ($15,000*8% + ($19,000-$15,001)*10%).

SaaS Sales Commission

Input

Average Recurring Revenue per account

Target commission at quota

Target number of deals

Output

Commission

=Target Commission / Quota in MRR

Quota in MRR

=ARR x Number of deals x 12

Compensation

=ARR x Commission

This model is based on Joel York’s article and states that the only difference between SaaS sales compensation and sales compensation for software (or other products) is that you should pay based on the lifetime value of the deal instead of the unit price of the product. Lifetime value is always proportionate to recurring revenue. So, from the very beginning, it’s easier to use MRR or ARR as the main metric in calculation commission.