How Much Will You Earn in Commission? (Calculate)

Why Commission Math Is Harder Than It Looks

Commission structures look simple on paper — a percentage of sales. But the real math involves quotas, tiers, splits, taxes, and the variance between your best and worst months. OTE (On-Target Earnings) is a particularly misleading figure: it represents what you'd earn at 100% of quota, but most reps hit quota less than half the time in their first year. And tiered commissions — which pay higher rates above certain thresholds — mean your actual effective rate depends heavily on where in your quota performance you land.

For real estate agents and brokers, the math is further complicated by brokerage splits, transaction fees, and self-employment tax. An agent who 'earns' $90,000 in gross commission actually keeps $54,000–63,000 after a 60/40 split and 35% effective tax rate — significantly less than a $90,000 salaried position would net.

This calculator handles all three common structures: flat rate (simplest), tiered accelerating (pay higher rates above thresholds), and split commission (agent keeps a percentage of gross). It shows you gross commission, your net take-home after taxes, and the revenue you need to generate to hit any target income — the number that actually determines whether a commission offer is competitive.

Calculate Your Commission Take-Home

Enter your commission structure, sales revenue, base salary, and tax rate to see gross commission, net take-home, and the revenue needed to hit your income target.

Calculate My Commission

How to Evaluate a Commission Compensation Package

1
Map out the exact commission structure in writing
Get the structure in writing before accepting any offer. Key details: commission rate at different revenue levels, quota amount, ramp period (first 3–6 months where quotas are lower), draw against commission (guaranteed minimum that's paid back against future earnings), and any clawback provisions (commission taken back if deals fall through).
2
Calculate your realistic earnings at 75%, 100%, and 125% of quota
OTE is calculated at 100% quota attainment. The calculator shows earnings at 75%, 100%, and 125% — because commission income is variable. In your first year, 75% is a reasonable planning assumption. For experienced reps in known territories, 100–125% is achievable. Build your personal budget around the 75% scenario to be conservative.
3
Calculate the revenue needed to match your current salary
This is the break-even revenue calculation: how much do you need to sell to net what you currently earn after taxes? The calculator solves this directly. Compare that number to the quota — if you need to hit 150% of quota just to break even with your current net income, the offer may not be competitive despite the high OTE.
4
For real estate agents: calculate net after split and taxes
A 3% commission on a $500,000 home generates $15,000 gross. At a 60/40 split, you keep $9,000. After 35% effective tax rate (including self-employment tax): $5,850 per transaction. With 10 transactions/year, gross appears to be $150,000 but you net $58,500. Run this calculation for your realistic transaction volume before comparing to a salaried alternative.
5
Evaluate total compensation, not just commission rate
Commission rate is only one variable. Also evaluate: base salary (higher base = more safety net), quota attainability (talk to current reps at the company), territory quality (leads and accounts you'll be assigned), sales support (SDRs, marketing leads, product-market fit), and the realistic earnings of top quartile performers in the role.

Commission vs. Salary: When Each Makes Sense

Commission-Heavy Roles Make Sense When

✓You have a strong existing network or book of business
✓The product has proven product-market fit and strong close rates
✓You're confident in your ability to consistently hit 100%+ of quota
✓The territory has an established pipeline, not a blank slate
✓OTE at 75% quota still beats your salary alternative after taxes

Salary or Lower-Commission Roles Make Sense When

✗You're entering a new industry or building a network from scratch
✗You have significant fixed expenses (mortgage, family) that need certainty
✗The product has a long sales cycle with high deal variance
✗You prefer predictability for financial planning and savings goals
✗The company doesn't have an established sales motion yet

Commission Income Questions

What is a draw against commission and should I avoid it?

A draw is an advance against future commissions — the company pays you a minimum income during ramp, and you repay it from future commissions once you start hitting your numbers. A 'recoverable draw' must be paid back; a 'non-recoverable draw' is essentially a guaranteed minimum that you keep. Recoverable draws are risky — if you don't perform well enough to repay, you can end up owing money when you leave.

How do I handle taxes on commission income?

If you're a W-2 employee, your employer should withhold taxes on commission like any other income — though supplemental rates apply. If you're 1099, pay quarterly estimated taxes to avoid underpayment penalties. A simple rule: set aside 30–35% of each commission payment immediately in a separate account earmarked for taxes. Never spend commission income without reserving taxes first.

What questions should I ask before accepting a commission role?

What percentage of reps hit quota each year? What's the median earnings of reps in their second and third year? How many reps have been at the company for 3+ years (retention is a signal of comp fairness)? What happened to the last rep in this territory? Is the quota based on realistic market size? What's the ramp period and draw structure? What's the clawback policy?

Model Your Commission Earnings

Flat, tiered, or split commission — the calculator shows your gross, net take-home, and the exact revenue you need to hit your income target.