TYPES OF COMMISSION

COMMISSION
 A FEE PAID FOR SERVICES, USUALLY A PERCENTAGE OF THE TOTAL COST.
 THE AMOUNT THAT RECEIVE IS BASED ON THE COMMISSION RATE THAT THE EMPLOYER SETS.
 PRODUCT OF THE COMMISSION RATE AND THE SALES AMOUNT.

If a commission rate r is applied on a sales amount S, then the commission C is

C=r . S
 C ?
DERIVED FORMULAS: C=r.S
r S r S
WHEN WE NEED TO GET THE COMMISSION, COVER C.
C C r=
 

r S ? S
WHEN WE NEED TO GET THE COMMISSION RATE, COVER R.
C C S=
 

r S r ?
WHEN WE NEED TO GET THE SALES AMOUNT, COVER S.
TYPES OF COMMISSION
1. STRAIGHT COMMISSION
2. SALARY-PLUS-COMMISSION
3. GRADUATED COMMISSION
STRAIGHT COMMISSION
- IS WHEN A PERSON IS PAID A PERCENTAGE OF SALES
ONLY.
-PRODUCT OF QUANTITY SOLD AND RATE OF
COMMISSION.
EXAMPLE!
Harry receives 30% commission on the appliances he sells. If he sells a TV for
Php350.00, a Refrigerator for Php400.00 and a heater for Php440.00. How much
does Harry make in commission?
GIVEN: QUANTITY SOLD = 350(TV), 400(REFRIGERATOR), 440(HEATER)
COMMISSION RATE = 30%
SOLUTION:
QUANTITY SOLD *COMMISSION RATE = STRAIGHT COMMISSION
(350 + 400 + 440) = 1190
1190 x 30%(.30) = Php357.00
SALARY-PLUS-COMMISSION
-A PERSON GETS PAID A SALARY AND A PERCENTAGE OF
SALES
-(SALES – QUOTA) * COMMISSION RATE
EXAMPLE!
Jay decides to work for another company that will pay him Php350.00 per week
and 6% of any sales above Php3000.00. If he sold goods worth Php5688.00 what is
his gross pay?
GIVEN: SALES = Php5688.00
QOUTA = Php3000.00
COMMISSION RATE = 6%
SOLUTION: (SALES – QOUTA) * COMMISSION RATE = SALARY-PLUS-COMMISSION
(5688 – 3000) x 6%(.06) = ?
2688 x 0.06 = Php161.28 (commission)
161.28 + 350 = Php511.28 (gross pay)
GRADUATED COMMISSION
-WHEN THE PERCENTAGE CHANGES BASED ON HOW
MUCH SOMEONE SELLS.
-RATE OF COMMISSION INCREASES AS SALES INCREASE.
-PRODUCT OF QUANTITY SOLD AND COMMISSION RATE.
EXAMPLE!
Darren works for a company that pays him 1% on the first Php5,000.00 sold, 2% on the next
Php15,000.00 sold and 3% on all sales over Php20,000.00. What is his gross pay if he sells Php25,000.00?
GIVEN: QUANTITY SOLD = 5,000 and 15,000
COMMISSION RATE = 1% and 2%
SOLUTION: QUANTITY SOLD * COMMISSION RATE = GRADUATED COMMISSION

(step1) 5,000 x 1%(0.01) = Php50.00 (step3)5,000 X 3%(0.03) = Php150.00

25,000 – 5,000 = Php20,000.00

(step2)15,000 X 2%(0.02) = Php300.00 (step4) 50 + 300 + 150 = Php500.00(gross pay)

20,000 – 15,000 = Php5,000.00
TRY!
1.Peter works as a salesperson. His employer pays him a salary of Php4,000
per week, plus a 3% commission whenever his sales exceed Php3,000. If he sold
items worth Php5,000 in a certain week, how much did he receive that week?
2. For every appliance he sells, Carl receives 6% commission. One day, he sold
a television set for Php12,000, a refrigerator Php17,000, and a washing machine for
Php8,000. How much is his commission?
GROUP ACTIVITY! (SHOW THE SOLUTION)
Eric works in an insurance company that pays him a
graduated commission based on the following scale:
• 5% commission on the first Php5,000 worth of sales;
• 10% commission on the next Php15,000 worth of sales; and
• 15% commission on sales in excess of Php20,000.

What is his total commission if he closed a deal worth

Php25,000?
ASSIGNMENT! (SHOW THE SOLUTION)
1. Ester is a real estate sales agent who receives a commission of 5% for every property that
he sells. If he successfully sell a house for Php5,000,000, how much will she get paid?
2. Koby has a house and lot worth Php6,000,000. His sales agent will receive a 10%
commission if the sales agent is able to sell the property. A client offered to give Koby a 50% down
payment and to pay the remaining amount on a monthly installment basis for 1 year. Koby
accepted the offer, and his sales agent agreed to receive his commission based on such
arrangement as well. Determine how much the sales agent would receive as commission:
a. at the point of sale; and
b. on each succeeding month.