Calculate base salary plus commission pay from base pay, sales and commission rate for any pay period, or find the sales needed to reach a target income.
Base Plus Commission Formula
The following formula applies to simple revenue commission. For gross-margin commission, replace sales with sales × gross-margin percentage / 100.
Variables:
- TE is the total earnings ($)
- B is the base salary ($)
- S is the total sales made ($)
- C is the commission rate (decimal)
For simple commission, multiply eligible sales revenue by the decimal commission rate and add base salary. OTE includes base plus target variable pay; the calculator offers capped and accelerated models. Tiered rates apply only within each stated range, with gaps earning no commission. A non-recoverable draw is a minimum variable-pay guarantee, so pay is base + max(draw, commission). A recoverable draw is an advance that commission offsets, including any prior balance. Use Additional fixed payment only when the payment is added on top of commission. These are planning estimates; your agreement controls actual payroll.
How to compare two flat commission plans
Compare the same eligible sales in the same pay period. Each plan pays base pay plus sales multiplied by its commission rate. Use zero as the base for a straight commission plan.
Break-even sales = (base pay B − base pay A) ÷ (rate A − rate B). Use decimal rates. Below a positive break-even amount, the higher base pays more. Above it, the higher rate pays more. A zero break-even means the plans tie at zero sales, then the higher rate wins. A negative break-even means the higher base wins at all nonnegative sales. If rates match, the higher base wins at every sales level. If bases and rates both match, the plans always tie.
Suppose Plan A pays $2,000 plus 3% of sales and Plan B pays 4.8% with zero base. Divide $2,000 by (0.048 − 0.03) to find the break-even sales of about $111,111.11. Plan A pays more below that point and Plan B pays more above it.
How to use hourly pay as the base
In Revenue commission mode, enter hourly wage × straight-time paid hours as Base salary. Use eligible sales and the commission rate for the same period. Gross pay = hourly wage × paid hours + eligible sales × decimal commission rate. This estimate excludes overtime premiums.
What is a Base Plus Commission?
A Base Plus Commission is a type of compensation structure commonly used in sales jobs, where employees receive a basic, guaranteed salary (base pay) and also have the opportunity to earn additional income (commission) based on the sales they make. The base pay ensures a steady income regardless of sales performance, while the commission serves as an incentive for the employee to make more sales. The specific percentage or amount of commission varies depending on the company’s policies and the individual’s sales performance.
How to Calculate Base Plus Commission?
The following steps outline how to calculate the Total Earnings for a Base Plus Commission.
- First, determine the base salary ($).
- Next, determine eligible sales revenue ($) for the same period as base salary.
- Next, enter the commission rate: 5% or 0.05 with the decimal unit selected.
- Next, use the formula TE = B + (S * C) to calculate the Total Earnings.
- Finally, insert the variables and calculate the result.
Example Problem:
Use the following variables as an example problem to test your knowledge.
base salary ($) = 500
eligible sales revenue ($) = 100
commission rate (decimal) = 0.05; estimated gross pay = $500 + ($100 × 0.05) = $505
