💰 Commission Calculator UK 2026
Calculate your sales commission, total earnings, and take-home pay after UK tax and National Insurance. Our free 2026 calculator supports simple commission, base salary + commission, and tiered commission structures used across retail, finance, technology, and real estate sales. Get accurate commission calculations with detailed breakdowns.
UK Commission Facts 2026
Typical Commission Rates
UK commission rates vary by industry: Retail/Manufacturing 7-15%, Technology/SaaS 10-12%, Financial Services 10-20%, Real Estate 1-3.5% of property value, Services 20-50%.
Commission is Taxed
All commission is taxed as employment income through PAYE: 20% basic rate, 40% higher rate, 45% additional rate plus 6-2% National Insurance contributions.
Average OTE Split
Most UK sales roles offer 70:30 salary to commission split. For example, £35,000 OTE = £24,500 base salary + £10,500 commission potential, balancing security with performance incentives.
Tiered Commission Benefits
Tiered structures increase motivation by offering higher rates at higher sales levels. Common UK tiers: 5% (£0-£20k), 8% (£20k-£50k), 12% (above £50k) encouraging top performance.
Who Can Use This Commission Calculator?
Sales Professionals
Calculate your earnings for retail, B2B, SaaS, finance, or real estate sales. Compare simple vs tiered commission structures and understand your take-home pay after tax. Plan your income and negotiate better commission rates.
Employers & HR Teams
Design competitive commission structures for your sales team. Calculate total cost including employer NI, compare different commission models, and benchmark against UK industry standards to attract and retain top sales talent.
Job Seekers
Evaluate commission-based job offers by calculating realistic earnings potential. Compare OTE (On-Target Earnings) packages and understand what you'll actually take home after tax from different commission structures.
Business Owners
Calculate commission costs for your sales team including tax implications. Design tiered structures that motivate performance while controlling costs. Compare commission-only vs base salary + commission models for your business.
🧮 Calculate Your Commission
Choose your commission structure and enter your sales details to calculate total commission, tax deductions, and take-home pay.
How the Commission Calculator Works
Choose Structure
Select your commission type: simple percentage, base salary + commission, or tiered structure with progressive rates for different sales levels.
Enter Sales Data
Input your total sales amount and time period. For tiered commission, set your threshold amounts and rates for each performance tier.
Calculate Earnings
Our calculator computes your gross commission using UK-standard formulas. For tiered structures, each bracket is calculated separately then summed.
Review Results
Get detailed breakdown of commission by tier, tax deductions using 2026/27 UK rates, take-home pay, annual projections, and industry comparisons.
Understanding Commission Pay in the UK
Commission is performance-based pay where you earn a percentage of the sales revenue you generate. It's widely used across UK industries including retail, technology, financial services, real estate, and B2B sales. Commission structures incentivise salespeople to maximise revenue while aligning their earnings with business success.
In the UK, commission is treated as employment income and is fully taxable through PAYE (Pay As You Earn). Your employer deducts Income Tax at 20%, 40%, or 45% depending on your total earnings, plus National Insurance contributions of 6% (between £12,570-£50,270) or 2% (above £50,270). This means your take-home commission is typically 70-94% of the gross amount.
Types of Commission Structures in the UK
Simple Commission: The most straightforward structure where you earn a fixed percentage of every sale. For example, 10% commission on £50,000 sales = £5,000 gross commission. This model is common in retail, real estate, and car sales where product prices are relatively stable.
Base Salary + Commission: Combines guaranteed base salary with performance-based commission, offering income security alongside earning potential. A typical UK split is 70:30 (base:commission). For example, £25,000 base + 8% commission on £100,000 sales = £33,000 total annual earnings. This structure is popular in B2B sales, technology, and financial services where sales cycles are longer.
Tiered Commission: Progressive rates that increase as you hit higher sales targets, motivating top performance. For example: 5% on first £20,000, 8% on £20,001-£50,000, 12% above £50,000. If you sell £60,000, you earn £20,000 × 5% (£1,000) + £30,000 × 8% (£2,400) + £10,000 × 12% (£1,200) = £4,600 total commission. Each tier is calculated separately, rewarding higher achievement with accelerating returns.
Commission Rates by UK Industry
| Industry | Typical Rate | Structure Type |
|---|---|---|
| Retail & Manufacturing | 7-15% | Simple or base + commission |
| Technology & SaaS | 10-12% of ACV | Base + tiered commission |
| Financial Services | 10-20% | Tiered commission |
| Real Estate | 1-3.5% of property value | Simple commission |
| Services | 20-50% | Commission-only or base + high commission |
| Car Sales | 15-25% | Base + commission or commission-only |
Your Rights with Commission Pay
Commission terms must be clearly stated in your employment contract, including calculation method, payment timing, and any conditions. Employers cannot unilaterally change commission structures without your agreement. If you're commission-only, UK law requires employers ensure your earnings meet National Minimum Wage (£12.21/hour from April 2026). If commission falls short, they must top up your pay.
💡 OTE (On-Target Earnings) Explained
OTE is your total potential earnings (base salary + expected commission) if you hit your sales targets. For example, "£45,000 OTE" typically means £31,500 base salary + £13,500 commission at 100% target achievement. Always ask what percentage of salespeople actually achieve OTE - realistic expectations are 60-80% achievement rates for well-designed plans.
Maximising Your Commission Earnings
Understand your commission structure thoroughly - know exactly what triggers payment and when you'll receive it. Track your sales and commission daily to spot trends and adjust your approach. In tiered structures, focus efforts on reaching the next threshold where rates jump. Negotiate commission rates when joining a company by researching industry benchmarks and demonstrating your proven sales track record. Consider total package value including base salary, commission potential, benefits, and support resources rather than just headline rates.
Real UK Commission Examples
Scenario 1: Retail Sales Assistant
Person: Sarah, clothing retail sales
Structure: Simple 12% commission on all sales
Monthly Sales: £15,000
Commission Rate: 12%
Gross Commission: £1,800
After Tax (20%): £1,320 take-home
Sarah earns £1,800 monthly commission (£21,600 annually) on £15,000 average monthly sales. After 20% basic rate tax and NI, she takes home £1,320 per month (£15,840 annually) from commission earnings.
Scenario 2: SaaS Account Executive
Person: James, software sales
Structure: £28,000 base + 10% commission (£42,000 OTE)
Quarterly Sales: £120,000 ACV
Base Salary: £28,000/year (£2,333/month)
Commission: £12,000/quarter
Total Annual: £76,000 (176% of OTE)
James significantly exceeded his £42,000 OTE target by closing £480,000 ACV annually. His total £76,000 earnings (£28,000 base + £48,000 commission) demonstrates the high earning potential in tech sales when you consistently exceed targets.
Scenario 3: Financial Advisor
Person: Priya, financial services
Structure: Tiered commission (8%/12%/18%)
Total Sales: £250,000
Tier 1 (£0-£100k): £8,000 (8%)
Tier 2 (£100k-£200k): £12,000 (12%)
Tier 3 (above £200k): £9,000 (18%)
Total Commission: £29,000
Priya's tiered structure rewards high performance with accelerating rates. Her £29,000 commission on £250,000 sales (11.6% effective rate) is significantly higher than if she had a simple 8% rate (£20,000), demonstrating how tiered structures incentivise exceeding targets.
Scenario 4: Estate Agent
Person: Marcus, residential property
Structure: Commission-only, 25% of agency fee (agency charges 1.5%)
Properties Sold: 3 homes (£300k, £450k, £275k)
Total Value: £1,025,000
Agency Fee (1.5%): £15,375
Agent Commission (25%): £3,844
Marcus earns £3,844 from three property sales this month. While commission-only roles offer no guaranteed income, successful estate agents can earn £40,000-£80,000 annually in the UK. His earnings require understanding take-home tax calculations for variable income.
Frequently Asked Questions
How do I calculate commission in the UK?
To calculate commission, multiply your sales amount by the commission rate percentage. For example, £50,000 sales at 10% commission = £50,000 × 0.10 = £5,000 commission.
For tiered commission, calculate each tier separately: sales in tier 1 × tier 1 rate, plus sales in tier 2 × tier 2 rate, then sum all tiers. Our calculator handles all commission structures including simple, base + commission, and tiered rates automatically.
What is a typical commission rate in the UK?
Typical UK commission rates vary by industry. Retail and manufacturing typically offer 7-15% commission. Financial services and technology range from 10-20%. Real estate agents earn 1-3.5% of property value.
SaaS sales offer 10-12% of Annual Contract Value. Service-based businesses may pay 20-50% commission due to lower overheads. The UK average for commission-based jobs is approximately £66,805 total annual earnings.
Is commission taxed in the UK?
Yes, commission is fully taxable in the UK as employment income. It's subject to Income Tax (20%, 40%, or 45% depending on your total earnings) and National Insurance contributions (6% employee NI between £12,570-£50,270, then 2% above).
Your employer deducts tax through PAYE before paying your commission. For example, a £5,000 commission payment for a basic rate taxpayer results in approximately £3,700 take-home after 20% tax and 6% NI deductions.
How does tiered commission work?
Tiered commission increases as you hit higher sales targets. For example: 5% on sales £0-£20,000, 8% on £20,001-£50,000, and 12% above £50,000.
If you sell £60,000, you earn: £20,000 × 5% = £1,000, plus £30,000 × 8% = £2,400, plus £10,000 × 12% = £1,200, totalling £4,600 commission. Each tier is calculated separately and then summed, rewarding higher performance with progressively better rates.
What is base salary plus commission?
Base salary plus commission (also called OTE - On-Target Earnings) combines guaranteed salary with performance-based commission. For example, £25,000 base salary plus 8% commission on £100,000 sales = £25,000 + £8,000 = £33,000 total annual earnings.
A typical split is 70% base salary and 30% commission, providing income security while motivating sales performance. This structure is common in B2B sales, technology, and financial services where sales cycles are longer and require sustained effort.
How do I calculate my take-home commission after tax?
Calculate take-home commission by deducting Income Tax and National Insurance. For example, a £5,000 commission payment: if you're a basic rate taxpayer, deduct 20% Income Tax (£1,000) and 6% employee NI (£300) = £3,700 take-home.
Higher rate taxpayers pay 40% Income Tax plus 2% NI, taking home approximately 58% of gross commission. Additional rate taxpayers (above £125,140) pay 45% tax plus 2% NI. Use our calculator with tax options enabled for accurate calculations based on 2026/27 UK rates.
What is commission-only pay?
Commission-only pay means your entire income comes from sales commission with no guaranteed base salary. You earn a percentage of every sale (typically 10-20% depending on industry). This structure offers high earning potential but no income security.
In the UK, commission-only workers are still entitled to National Minimum Wage protection - if commission falls below minimum wage (£12.21/hour from April 2026), employers must top up your pay. This structure is common in estate agency, insurance sales, and some retail sectors.
Can my employer change my commission structure?
Your commission structure is part of your employment contract, so employers cannot unilaterally change it without your agreement. Any changes to commission rates, calculation methods, or payment terms require either your consent or proper contractual notice.
If your employer reduces commission without agreement, you may have a breach of contract claim and could potentially claim constructive dismissal. Always get commission terms in writing and seek legal advice if your employer attempts to change them retrospectively or without consultation.
Data Sources and Accuracy
This calculator uses official UK government tax rates and industry-standard commission calculation methods for 2026/27:
- Income Tax Rates: GOV.UK Income Tax Rates 2026/27
- National Insurance: GOV.UK National Insurance Contributions
- Commission Structures: UK employment standards and industry benchmarking data
- Industry Rates: 2026 UK sales compensation surveys and market research
Calculation Methodology: Commission is calculated using percentage-based formulas (sales × rate). For tiered structures, each bracket is calculated separately and summed. Tax calculations use PAYE rates with standard deductions. All amounts rounded to 2 decimal places.
Last Updated: January 2026
⚠️ Important Disclaimer
This calculator provides estimates for informational and planning purposes only. Actual commission and tax may vary based on your specific employment contract, additional income sources, tax code, pension contributions, and other deductions. Always verify commission calculations with your employer and consult official payslips for exact amounts. For tax advice, speak to a qualified accountant or tax advisor.
Your Privacy and Data Protection
Your privacy matters. This commission calculator operates entirely in your browser using client-side calculations. We do not store, transmit, or collect any of your financial data, sales figures, or calculation results.
How It Works: All commission calculations happen locally on your device using JavaScript. Your sales data never leaves your browser. No information is sent to external servers, stored in databases, or shared with third parties. You can use this calculator completely anonymously with full confidence in data security.
Browser Storage: We use sessionStorage to temporarily remember your inputs during your current browsing session (so you don't lose data if you accidentally refresh). This data is automatically deleted when you close your browser and is never accessible to us or anyone else.