1. What is Commission-Based Salary?

Commission-based salary is a compensation structure where employees earn a base salary plus a percentage of the sales they generate. This model is common in sales positions across California.

2. How the Calculator Works

The calculator uses the following formula:

Where:

• Base Salary — Fixed amount paid regardless of sales
• Sales Amount — Total value of sales made
• Commission Rate — Percentage of sales paid as commission
• Tax — Estimated tax deductions

3. California Commission Laws

Details: California labor laws require that commissioned employees must earn at least minimum wage when you divide their total compensation by hours worked. Commission agreements must be in writing.

4. Using the Calculator

Tips: Enter your base salary, total sales amount, commission rate (as a percentage), and estimated taxes. All values must be non-negative numbers.

5. Frequently Asked Questions (FAQ)

Q1: Is commission taxable in California?
A: Yes, commissions are considered taxable income and subject to federal and state income taxes, Social Security, and Medicare taxes.

Q2: What's a typical commission rate in California?
A: Rates vary by industry but typically range from 5% to 20% of sales. Tech sales often have lower base salaries but higher commission rates.

Q3: When must commissions be paid in California?
A: Commissions must be paid as soon as they're earned and calculable, but at least twice per month on designated paydays.

Q4: Are commission-only jobs legal in California?
A: Yes, but the employee must still earn at least minimum wage for all hours worked when commissions are averaged over the pay period.

Q5: How are commissions treated in overtime calculations?
A: Commissions must be included in the regular rate of pay when calculating overtime wages in California.