Tax Commission Calculator
A $5,000 commission is never really $5,000. Between the flat 22% federal supplemental withholding, Social Security and Medicare, and state tax, a typical check loses a third before it reaches you. Enter your sale amount and commission rate below and this calculator shows the gross payout, every tax slice, your net commission, and how the flat 22% compares with your actual marginal rate. If your pay mixes a base salary with commission, our base plus commission calculator models the combined plan; to translate a commission into an hourly equivalent, try the commission to hourly calculator; and our tax rate calculator pins down the effective rate behind these numbers.
Estimate only. Withholding is not your final tax; consult a tax professional for your situation.
Quick Answer
Net commission equals the sale amount times your rate, minus federal supplemental withholding (usually 22%), Social Security (6.2%), Medicare (1.45%) and state tax. For example, a $50,000 sale at 10% pays $5,000 gross; after $1,100 federal, $310 Social Security, $72.50 Medicare and $250 state tax, the net commission is $3,267.50, a 34.65% effective tax bite.
💡 Key takeaways
- Gross commission = sale amount times your commission rate.
- Employers usually withhold a flat 22% federal on commissions as supplemental wages.
- Social Security (6.2%) and Medicare (1.45%) apply on top of income tax.
- Withholding is not your final tax: your marginal rate decides what you truly owe.
The worked example, checked against this exact tool
Short answer: $50,000 sale, 10% rate, 22% federal, 5% state: net $3,267.50.
Gross: $50,000 x 10% = $5,000. Federal supplemental withholding: $5,000 x 22% = $1,100. Social Security: $5,000 x 6.2% = $310. Medicare: $5,000 x 1.45% = $72.50. State: $5,000 x 5% = $250. Total tax: $1,732.50. Net: $5,000 – $1,732.50 = $3,267.50. Enter the defaults and every figure matches.
Why 22% comes out of your commission check
Short answer: the IRS treats commissions as supplemental wages, withheld at a flat 22%.
Commissions are ordinary income, taxed at your normal rates when you file. But at payroll time the IRS lets employers use a shortcut: withhold a flat 22% on supplemental wages instead of running the W-4 tables. That is why a commission check can look worse than your salary check even when your real marginal rate is 12%. The flat rate is just a prepayment; the true tax is settled on your return. One exception to memorize: supplemental pay above $1 million in a year is withheld at 37%.
Flat withholding vs your marginal rate
Short answer: 22% is a prepayment; your marginal bracket decides the real bill.
If your top bracket is 12%, the 22% withholding overpays and you get the difference back as a refund. If it is 32%, you will owe more in April. The calculator’s comparison line shows both: at a 24% marginal rate the same $5,000 commission carries $1,200 of federal tax instead of $1,100, for a net of $3,167.50. Use the IRS Tax Withholding Estimator after a big commission month to avoid an underpayment surprise.
Flat 22% withholding
- Simple payroll shortcut, same for everyone
- Often over-withholds for lower brackets
- Difference refunded at filing time
Your marginal rate
- The rate your last dollar is actually taxed at
- Depends on total income and filing status
- What you truly owe, settled on your return
What competing calculators miss
Commission tools compute the gross and stop, as if tax did not exist. Tax tools compute withholding but ignore that commissions also draw Social Security and Medicare, and none show the flat-22% vs marginal-rate gap that decides whether April brings a refund or a bill. This page does all three from one input set, with the federal rule cited to the IRS publication behind it.
Frequently asked questions
Multiply the sale amount by your commission rate: $50,000 at 10% pays $5,000 gross. Then subtract taxes to get the net.
Yes. Commissions are ordinary income under IRS rules, taxed at your normal federal, state and FICA rates. Only the withholding method is special.
Employers may withhold a flat 22% on supplemental wages instead of using W-4 tables. It is a prepayment, not your final tax rate.
Yes. The 6.2% Social Security and 1.45% Medicare taxes apply to commission pay, up to the annual Social Security wage base ($184,500 for 2026).
Only the dollars above the threshold are taxed at the higher rate; the rest keeps its lower rate. Brackets are marginal, so a big commission never taxes your whole income at the top rate.
Contractors get no withholding at all and owe self-employment tax instead of employee FICA. Whether you are an employee or contractor follows IRS classification rules.
Supplemental wages above $1 million paid to one employee in a year must be withheld at 37%. Below that line, 22% applies.
The flat 22% is optional for employers; they may instead fold the commission into regular withholding tables. You can also adjust your W-4 to tune the outcome.
Most states with an income tax treat commissions as wages and tax them. A few states have no income tax at all; enter 0 for the state rate in those cases.
Often yes. A large commission can over- or under-withhold relative to your real liability. Run the IRS withholding estimator and file a new W-4 if the gap is material.
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References
[1] Internal Revenue Service. "Publication 15: Employer's Tax Guide (supplemental wages)" irs.gov: Publication 15: Employer's Tax Guide (supplemental wages) (Accessed Oct 18, 2026).
[2] Internal Revenue Service. "Publication 525: Taxable and Nontaxable Income" irs.gov: Publication 525: Taxable and Nontaxable Income (Accessed Oct 18, 2026).
[3] Internal Revenue Service. "Topic 751: Social Security and Medicare Withholding Rates" irs.gov: Topic 751: Social Security and Medicare Withholding Rates (Accessed Oct 18, 2026).
[4] Internal Revenue Service. "Tax Withholding Estimator" irs.gov: Tax Withholding Estimator (Accessed Oct 18, 2026).
[5] Cornell Legal Information Institute. "29 CFR 778.107: General Requirements for Overtime Pay" law.cornell.edu: 29 CFR 778.107: General Requirements for Overtime Pay (Accessed Oct 18, 2026).
[6] Internal Revenue Service. "Inflation-Adjusted Tax Items by Tax Year" irs.gov: Inflation-Adjusted Tax Items by Tax Year (Accessed Oct 18, 2026).
[7] Internal Revenue Service. "Topic 762: Independent Contractor vs. Employee" irs.gov: Topic 762: Independent Contractor vs. Employee (Accessed Oct 18, 2026).
[8] Internal Revenue Service. "Independent Contractor (Self-Employed) or Employee?" irs.gov: Independent Contractor (Self-Employed) or Employee? (Accessed Oct 18, 2026).
[9] Cornell Legal Information Institute. "26 USC 61: Gross Income Defined" law.cornell.edu: 26 USC 61: Gross Income Defined (Accessed Oct 18, 2026).
[10] Cornell Legal Information Institute. "26 USC 3401: Definitions (Wages)" law.cornell.edu: 26 USC 3401: Definitions (Wages) (Accessed Oct 18, 2026).