Commission is easily calculated, as you only need two parts: total value of sales generated, and the commission percentage that the seller takes home. All you do is multiply the two numbers. The formula is shown below:
You’ve walked on to a car lot, and someone quickly shuffles over to overwhelm you with the sales job of a lifetime. You buy it, as you are after a shiny new car. Suppose the car costs $25,000, and the salesman’s commission is 3%. To calculate the commission that the salesman will take home, multiply $25,000 by 3%. The calculation is shown below:
The salesman will take home $750 from that sale as earned income. You can use this formula to help approximate how much you would have to pay employees based on forecasted sales with different commission rates, or you can use this as a way to see how much you have to sell in order to reach a certain goal! Many times, bonuses will be attached if a salesperson reaches certain benchmarks.