Free tool
Tiered commission calculator
Enter sales and tiers to see commission with the marginal method and with the rate on the whole amount. Every tier is shown, so you can see where the difference comes from.
How the calculator works
Marginal or whole amount
In a tiered plan the rate rises when sales pass set limits. The question is which sales the higher rate applies to.
With the marginal method each rate only applies to the sales inside its tier. With 5% up to DKK 200,000, 8% up to DKK 350,000, 10% up to DKK 500,000 and 12% above, DKK 420,000 in sales gives 10,000 + 12,000 + 7,000 = DKK 29,000.
With the rate on the whole amount, the rate of the highest tier reached applies to all sales: DKK 420,000 × 10% = DKK 42,000. Commission jumps each time a limit is reached, which can tempt reps to move deals between periods.
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Frequently asked questions
What is tiered commission?
A commission plan where the rate rises in steps as sales pass set limits. It rewards reps who sell more without making the first krone expensive.
What is the difference between marginal and whole-amount tiers?
Marginal: each rate only applies to sales inside its tier. Whole amount: the highest rate reached applies to all sales. Whole amount pays most, but jumps at every limit.
What happens exactly at the limit?
In the calculator the next tier applies once sales reach the limit. Always state in the commission agreement whether the limit belongs to the tier below or above.
How many tiers should a plan have?
Usually three or four. More tiers make the plan hard to explain, and reps should be able to work out their own commission.
Stop calculating commission in spreadsheets
Prowi pulls sales from your CRM and calculates commission automatically for every rep and every deal, using the rules you have agreed. Reps can follow along themselves.