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Commission Index

Effective rate across product lines

Blended commission rate calculator

When new business, renewals and services each pay a different rate, the rate a rep actually earns depends on the mix. Enter revenue and rate for up to four lines to see the blended rate and where the commission comes from.

Updated 2026-10-16 · Independent expert review pending · Free, no sign-up

Line 1
Line 2
Line 3 (optional)
Line 4 (optional)

Blended commission rate

7.56%

Total commission ÷ total revenue.

Total commission
$68,000.00
Total revenue
$900,000.00
Line 1 share of commission
73.53%
Line 2 share of commission
17.65%
Line 3 share of commission
8.82%
Line 4 share of commission
0%

How this is calculated

  1. Line 1: revenue × 10% $50,000.00
  2. Line 2: revenue × 4% $12,000.00
  3. Line 3: revenue × 6% $6,000.00
  4. = Total commission $68,000.00
  5. Total revenue $900,000.00
  6. Blended rate: commission ÷ revenue 7.56%
Commission by product line
$50KLine 1$12KLine 2$6KLine 3
Data table
Commission by product lineCommission
Line 1$50K
Line 2$12K
Line 3$6K
  • • The blended rate moves with the revenue mix: the same rates give a different blend when the mix shifts.

The link stores plan settings only — never names or deal lists.

Worked example

A rep sells $500,000 of new business at 10%, $300,000 of renewals at 4% and $100,000 of services at 6%.

InputValue
Line 1 revenue$500,000.00
Line 1 commission rate10%
Line 2 revenue$300,000.00
Line 2 commission rate4%
Line 3 revenue$100,000.00
Line 3 commission rate6%
ResultValue
Blended commission rate 7.56%
Total commission $68,000.00
Total revenue $900,000.00
Line 1 share of commission 73.53%
Line 2 share of commission 17.65%
Line 3 share of commission 8.82%
Line 4 share of commission 0%
  1. Line 1: revenue × 10%: $50,000.00
  2. Line 2: revenue × 4%: $12,000.00
  3. Line 3: revenue × 6%: $6,000.00
  4. = Total commission: $68,000.00
  5. Total revenue: $900,000.00
  6. Blended rate: commission ÷ revenue: 7.56%

How the blended rate is calculated

Line commission = line revenue × line rate

Blended rate = (sum of line commissions) ÷ (sum of line revenue)

Line share of commission = line commission ÷ total commission

The blended rate is a revenue-weighted average, not the simple average of the rates. In the example, the simple average of 10%, 4% and 6% is 6.67%, but the blended rate is about 7.56% because new business, the highest-paying line, is more than half of revenue.

What the blended rate is useful for

  • Budgeting: multiply forecast revenue by the blended rate to estimate commission cost, then refine it with the commission budget calculator.
  • Plan design: check that the mix you want to encourage actually pays more. If renewals carry most of the commission, the plan may reward account maintenance over new logos.
  • Comparison: compare a rep’s blended rate with the company-wide cost of sales from the total commission rate calculator.

For a single deal at one rate, the commission calculator is simpler. Terms like effective rate are defined in the glossary.

Limitations

  • Flat rates per line only: tiers, accelerators and caps are not applied.
  • The result describes one period’s mix; a different mix next period gives a different blend.
  • Estimates only — your signed compensation plan governs what is paid.

Frequently asked questions

What is a blended commission rate?

It is the single rate that would produce the same total commission on the same total revenue: total commission divided by total revenue across every product line or deal type.

Why is the blended rate not the average of my rates?

Because each rate applies to a different amount of revenue. Lines with more revenue weigh more, so the blend leans toward the rate of your biggest line.

Can I use it for more than four lines?

Group smaller lines that share a rate into one line, or run the calculator twice and combine the totals: add the commissions and the revenue, then divide.

Does a higher blended rate mean a better plan?

Not on its own. A higher blend means more commission per dollar of revenue; whether that is good depends on the margin of each line and the behavior the plan is meant to drive.

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