Common Sales Commission Mistakes (and a Better Way)

Updated 31 August 2026 · Business and gst

A Sales Commission Calculator gives a fast answer, but the answer is only as good as what goes in. These are the mistakes we see most often with sales commission calculations in Australia, and how to avoid them.

1. Undercharging as a contractor

Your rate must cover super, leave, unbilled time and business costs, not just the salary you want.

2. Forgetting on-costs

An employee costs well above their salary once super, workers comp and payroll tax are included.

3. Mixing up margin and markup

A 50% markup is a 33% margin. Pricing with the wrong one can erase profit.

4. Spending GST collected

GST belongs to the ATO. Keep it aside until your BAS is due.

5. Overlooking the detail that matters most here

Commission on ordinary hours usually counts as ordinary time earnings, so super is payable on it.

How the total pay (base plus commission) changes with commission rate

A common mistake is getting one input slightly wrong. Here is what happens to the total pay (base plus commission) when “Commission rate (%)” is off by up to 20% in either direction, with everything else held steady.

Commission rate (%)	Total pay (base plus commission)
4	$5,000.00
5	$5,500.00
6	$6,000.00

At 4 the result is $5,000.00; at 6 it is $6,000.00. If a small change in this input moves the answer a lot, it is worth double-checking that figure before you rely on the result.

A quick sense check

Commission = sales × rate. Total = base + commission. With typical inputs the calculator returns total pay (base plus commission) of $5,500.00. If your own result looks wildly different, check that each figure is in the right unit and period (weekly, monthly or yearly) before drawing conclusions.