1. What is Commission-Based Pay?

Commission-based pay is a compensation system where earnings are directly tied to sales performance. In the Philippines, this is common in retail, real estate, and other sales-oriented industries. The amount earned is calculated as a percentage of the sales value.

2. How the Calculator Works

The calculator uses these formulas:

Where:

• Sales Amount — Total value of sales in Philippine Pesos (PHP)
• Commission Rate — Percentage of sales paid as commission
• Tax — Withholding tax based on Philippine tax laws

3. Philippine Tax Considerations

Details: In the Philippines, commissions are subject to withholding tax. The rate depends on whether the recipient is an employee or independent contractor, and their tax bracket.

4. Using the Calculator

Tips: Enter sales amount in PHP, commission rate as percentage (e.g., 5 for 5%), and applicable tax rate. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What's a typical commission rate in the Philippines?
A: Rates vary by industry but typically range from 2-15% of sales value.

Q2: How is tax calculated on commissions?
A: For employees, it's based on graduated tax rates. For independent contractors, it's typically 10% withholding tax.

Q3: Are commissions subject to SSS/PhilHealth/Pag-IBIG?
A: For employees, yes. For independent contractors, no unless voluntarily contributed.

Q4: When are commissions usually paid?
A: Payment schedules vary but are often monthly, sometimes with advance payments (called "draws").

Q5: Can commission rates vary by product?
A: Yes, many companies have tiered commission structures based on product type or profitability.