Guides
How to calculate commission
5 min read
Commission math looks intimidating from the outside, but every pay plan in the business boils down to the same core formula plus a handful of adjustments. Here's the formula, the dealership version of it, and worked examples you can copy.
The universal commission formula
The formula
Sell $50,000 of product at a 5% commission rate and you earn $2,500. Everything else — packs, minis, tiers, splits — is just a rule that changes which number goes into “commissionable amount” or “rate”.
The dealership version
Car, RV, marine and powersports pay plans split the deal into front-end and back-end gross and deduct the pack first:
Dealership formula
A deal with $2,400 front gross, an $800 pack, $1,850 back gross, and a 25% / 5% pay plan: ($2,400 − $800) × 25% + $1,850 × 5% = $400 + $92.50 = $492.50.
Worked examples
| Scenario | Math | Pays |
|---|---|---|
| Standard deal | ($2,400 − $800) × 25% + $1,850 × 5% | $492.50 |
| Mini deal (little gross) | 25% of $150 = $37.50 → below the $200 mini | $200 |
| Split deal (half credit) | Full math = $620 → above mini → halved | $310 |
| Negative front after pack | Front −$300 → store pays a $100 flat instead | $100 + back |
| Capped deal | $1,240 computed, cap $1,000 | $1,000 |
The split-deal row deserves a second look: on many plans a half-credit deal pays half the commission — but if the halved amount would come out below the mini, plans commonly pay half the mini instead. Check how your store writes it.
Tiered rates
With a tiered plan, the rate itself depends on how many units you've sold this month. At 22% up to 8 units and 25% after, your ninth deal is worth more than your first — and on a retroactive plan, crossing the line re-prices all of them. To estimate a month, compute each deal at the rate in effect when it closes, then recompute everything at the top rate if your plan is retro.
Try it now
Rather do it live than on paper? Enter your deal below — front, back, pack, mini, tier and all — and see the number instantly.
Free commission calculator
No signupThis deal pays you
$493
Front-end commission
$2,400 − $800 pack = $1,600 × 25%
$400
Back-end commission
$1,850 × 5%
$93
Estimate only — your store's pay plan decides the real check. Percentages apply to gross profit after the pack, like most dealership pay plans.
What a month of deals like this looks like
10 deals at base rate
$4,925
With tier bump after unit 8
$5,125+$200
In the app, tiers, minis, caps and bonuses apply automatically as you log each deal.
Track it automaticallyGet it right every time
- Get your pay plan in writing — rates, pack, minis, tiers, and whether tiers are retroactive.
- Write down the gross on every deal the day it closes, not at month end.
- Track front and back separately; they almost always pay different rates.
- Reconcile your log against the check every payday — errors happen, and they rarely fix themselves.
If you'd rather skip the spreadsheet, CommissionDesk does this math automatically for every deal you log — including tiers, minis, caps and bonuses.