Commission Calculator

Commission rates vary widely by industry. Real estate agents typically earn 2.5% to 3% per side, car salespeople earn 20% to 25% of the profit, and SaaS sales reps often earn 5% to 15% of the contract value. The average across industries is about 5% to 10%.

A draw is an advance against future commissions. If you receive a $3,000 monthly draw, your earned commissions must exceed $3,000 before you earn additional money. A recoverable draw must be paid back if commissions fall short; a non-recoverable draw does not.

Tiered or graduated commissions increase the rate as you sell more. For example, 5% on the first $50,000, 7% on $50,001 to $100,000, and 10% above $100,000. Each tier applies only to the sales within that range, similar to tax brackets.

No, commission income is taxed as regular earned income. Your employer may withhold taxes at a flat 22% supplemental rate, which can make your paycheck look different from salary, but at tax time it is all treated the same.