Commission definition
/What is a Commission?
A commission is a fee paid to a salesperson in exchange for services in facilitating or completing a sale transaction. It is typically paid in addition to a baseline salary, though some salespeople receive no baseline salary at all.
How are Commissions Calculated?
A commission may be structured as a flat fee, or as a percentage of the revenue, gross margin, or profit generated by the sale. It is more difficult to calculate a commission based on gross margin or profit, so these options are rarely used.
Other Types of Commissions
Commissions may also be charged by brokers to assist in the sale of securities, properties, and so forth.