Enter the total sales ($), the break point sales ($), and the percentage of sales (%) into the calculator to determine the Percentage Rent. A percentage rent is a fee that a tenant pays on top of their base rent based on how much revenue in sales they earn past a given break point that is agreed upon at the signing of the lease.
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Percentage Rent Formula
The following formula is used to calculate the Percentage Rent.
Rsales = (TS - BPS) * POS/100
- Where Rsales is the Percentage Rent ($)
- This is the additional rent owed on top of base rent
- TS is the total sales ($)
- BPS is the break point sales ($)
- POS is the percentage of sales (%)
How to Calculate Percentage Rent?
The following example problems outline how to calculate Percentage Rent.
Example Problem #1
- First, determine the total sales ($). In this example, the total sales ($) is given as 500000 .
- Next, determine the break point sales ($). For this problem, the break point sales ($) is given as 250000 .
- Next, determine the percentage of sales (%). In this case, the percentage of sales (%) is found to be 5.
- Finally, calculate the Percentage Rent using the formula above:
Rsales = (TS – BPS) * POS/100
Inserting the values from above yields:
Rsales = (500000 – 250000) * 5/100 = 12,500 ($)
Example Problem #2
The variables needed for this problem are provided below:
total sales ($) = 600000
break point sales ($) = 300000
percentage of sales (%) = 7
Entering these values and solving gives:
Rsales = (600,000 – 300,000) * 7/100 = 21,000 ($)