CommissionlyTiered Commission Calculator
This tiered commission calculator compares a marginal, graduated plan with a retroactive plan on the same sales and the tiers you edit.
How to calculate tiered commission
A tier is a slice of sales with its own rate. The starter table is 5% from $0 through $50,000, 8% above $50,000 through $100,000, and 10% above $100,000. An amount that lands on a boundary stays in the lower tier. $50,000 is still the 5% tier. $50,000.01 is the 8% tier.
Marginal, sometimes called graduated commission, pays each rate only on the dollars inside that tier. On $120,000: $50,000 times 5% is $2,500, the next $50,000 times 8% is $4,000, and the last $20,000 times 10% is $2,000. Total $8,500. Dollars in a gap between tiers, if you leave one, pay nothing.
Retroactive, or flat by the tier reached, pays the rate of the highest tier the total falls in, on every dollar. $120,000 reaches the 10% tier, so the commission is $120,000 times 10%, or $12,000. Same tiers, different rule, $3,500 more. The plan has to say which rule it uses. The names get mixed up in conversation.
Worked example
Leave the default tiers and enter $120,000. Marginal pays $8,500. Switch to retroactive and the same sales pay $12,000. The page also prints the other method under the result so you can see the gap without retyping the sale.
At exactly $100,000, retroactive is still 8%, because the 10% tier starts above $100,000. Commission is $8,000. One dollar more is $100,000.01 times 10% under the retroactive rule. That cliff is why the rule has to be written down before someone is paid.
Marginal tiers versus retroactive tiers
Graduated commission usually means marginal: you never give back the lower rate on the earlier dollars. Retroactive plans do the opposite once a tier is reached, and they can jump at the boundary. A seller at $99,000 and a seller at $101,000 can be far apart on a retroactive plan and only a little apart on a marginal one. Read the word in the plan, not the word people use in a meeting.
You can add and delete rows. The last row can have a blank end, which means no ceiling. Tiers cannot overlap. If the plan uses monthly tiers, enter the month's sales. If it uses annual tiers, enter the year. This page does not accumulate months for you. A single quota line is often easier on the sales commission calculator.
| Method | What the rate covers | Commission |
|---|---|---|
| Marginal | 5% on the first $50,000, 8% on the next $50,000, 10% on $20,000 | $8,500 |
| Retroactive | 10% on the entire $120,000 | $12,000 |
FAQ
What is a graduated commission?
Graduated commission is the marginal method. Each rate applies only to the sales inside its tier. On the default table, $120,000 pays $2,500 at 5%, $4,000 at 8%, and $2,000 at 10%, for $8,500. Earlier dollars do not get repriced when you reach a higher tier. If your plan reprices everything, it is retroactive, not graduated.
What is the difference between marginal and retroactive tiers?
Marginal pays a different rate on each slice. Retroactive pays one rate, the rate of the tier you reached, on the whole amount. At $120,000 on the default tiers, marginal is $8,500 and retroactive is $12,000. The sales number did not change. Only the rule changed. Your plan should name the rule.
Which tier includes the exact boundary?
The lower tier includes its end amount. $50,000 is paid at 5%, not 8%. $100,000 is still in the 8% tier for a retroactive lookup. The next tier starts on the next dollar. If your plan says the opposite, move the boundary by one dollar in the table so the page matches the document.
Can I change the commission tiers?
Yes. Edit the start, end, and rate on each row, add a row, or remove one. Leave the end blank on the top tier if there is no ceiling. Rows cannot overlap, and a middle row cannot be open-ended. Reset restores 5%, 8%, and 10% at $50,000 and $100,000.
What if my tiers are monthly?
Enter that month's sales, not the year, and use the monthly tier amounts in the table. This calculator does not store last month. An annual plan should get the year-to-date or full-year sales the plan uses, and the annual tier table. Mixing a monthly sale with annual tiers will not match payroll.
Why is retroactive so much higher at the top tier?
Because the higher rate replaces the lower ones on every dollar already sold. Crossing $100,000 on the default table moves the entire balance from 8% to 10% under the retroactive rule. Marginal only puts 10% on the dollars above $100,000. That is the whole difference, and it is why the cliff matters.
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About this calculator
Commissionly calculates marginal tiers on the overlap of the sale with each band, and retroactive tiers as the full sale times the rate of the band that contains it. Boundaries belong to the lower tier. Last updated October 22, 2026.
Last updated October 22, 2026.