Commission Calculator
How to Calculate Commission
A commission is a percentage-based fee paid to a salesperson or agent for facilitating a transaction. The calculation is simple, but its effect on the final price depends on who bears the cost—the seller or the buyer. This calculator helps visualize both scenarios.
The Commission Formula
The core of the calculation is finding the commission amount itself. The formula is:
Commission Amount = Sale Price × Commission Rate / 100
- If the **seller** pays, this amount is subtracted from the sale price to determine their net revenue.
- If the **buyer** pays, this amount is added to the sale price to determine their total cost.
Frequently Asked Questions (FAQ)
What is a typical commission rate?
Commission rates vary widely by industry. For manufactured goods, rates of 7-15% are common. For services, commissions can be much higher, sometimes between 20% and 50%, due to lower overheads.
How do I calculate a 5% commission on a $2,000 sale?
You would calculate `($2,000 * 5) / 100`, which equals a **$100 commission**. If the seller pays, they receive $1,900. If the buyer pays, they pay a total of $2,100.