What is a typical sales commission rate?

Commission rates vary widely by industry: Real estate agents typically earn 2.5–3% per side (total 5–6% split between buyer and seller agents). Car sales: $200–500 flat or 20–25% of gross profit. SaaS software: 5–10% of annual contract value. Retail: 5–10%. Financial advisors: 0.5–1% of AUM annually or 3–5% on product sales. B2B enterprise software: 10–20% of first-year revenue.

How does tiered commission work?

Tiered commission pays higher rates as you hit higher sales levels. Example: 5% on first $10,000, 8% on $10,001–$25,000, 12% above $25,000. If you sell $30,000: 5% × $10,000 = $500 + 8% × $15,000 = $1,200 + 12% × $5,000 = $600 = total $2,300 (7.67% effective rate). This incentivizes exceeding targets.