Commission is a percentage of sales that is paid to a salesperson. For example, a fashion retail worker who receives 1% of the total value of all the clothes they sell. Commission is a percentage of sales that is paid to a salesperson.
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Commission is worked out as follows: Commission = total sales ÷ 100 × commission rate
Therefore, if the fashion retail worker earning 1% commission on their sales sells €1,500 worth of clothes in a week, their weekly commission will be 1% of €1,500:
1,500 ÷ 100 × 1 = €15 commission
Commission is added to an employee’s basic wage. It is a good way to motivate sales staff as the more they sell, the higher their wages will be.
Jonny Lyons is a car salesman. He earns a commission of 2%. This means that for each car Jonny sells he will receive 2% of the sale price.
During one week of work, Jonny sold two cars. The total value of the cars was €27,000. How much commission did Jonny make that week?
GROSS PAY
An employee’s basic pay, plus any additional pay they earn, such as overtime, commission or a bonus is called gross pay.
