Formula
Sales up to the quota earn nothing. The rate applies to the remainder:
Commission = (sales − quota) × commission rate
When sales are below the quota, the commission is zero.
Assumptions
- One rate applies after the quota.
- The quota is a money amount, not a unit count.
Worked example
$40,000.00 of sales, a $10,000.00 quota, and a 5% rate pay a commission of $1,500.00.
Input definitions
- Quota
- Sales that must be reached before the rate applies. Zero means the rate applies to all sales.
- Commission rate
- The percent paid on sales above the quota.
Limitations
This is a planning estimate, not accounting, tax, payroll, or advertising advice. The currency control changes the symbol only.
Questions
What if there is no quota?
Enter zero. The rate then applies to the full sales amount.
Does this handle tiers?
No. It is one quota and one rate, not a ladder of rates.