This document defines key terms related to sales commissions and overrides. It provides formulas and examples for calculating: - Plain commission based on total sales and commission rate - Gross earnings which includes basic salary and commission - Gross earnings when an agent has a sales quota and earns commission on sales exceeding the quota - Gross earnings that include basic salary, commission, and overrides earned from sales of other agents.

1. Commission &
Overrides

3. DEFINITIONS
Commission
Incentives that salesmen, agents and brokers receive for increasing a firm's sales.
Commission Rate
Percentage of the commission from the total sales.
Total sales
Sales made by the agent.
Basic Salary
Monthly compensation of an agent from the company.
Overrides
incentives received based on the sales of people under marketing or product managers.
Gross Earnings
Total of the basic salary, commission and the overrides.

4. Plain Commission

5. How to get the Plain
Commission?
Formula :
Commission = Total Sales X Commission Rate

6. Example
Carmen is sales agent for the High Ace Realty. She
is Paid based on commission only. She is given a 2%
commission on her sales. For the current month, her
sales was P 1,035,000. Find her commission.

7. Given & Solution
Commission rate = 2% = 0.02
Sales = P 1,035,000
Given :
Commission = Total Sales × Commission rate
= P 1,035,000 × 0.02
= P 20,700
Solution :

8. Gross Earnings
( With basic salary and commission )

9. Gross Earnings (W/ Basic Salary And
Commission )
Gross Earnings = Basic Salary + Commission
= Basic Salary + ( Sales × Rate )
Formula :

10. Example :
Carmen is a sales Agent for the High Ace Realty. She is
paid based on commission only. She is given a 2%
commission on her sales. For the current month, her sales
was P 1, 035,000.
If she has a basic salary of P10,000 per month, what is
her basic salary?

11. Commission rate = 2% = 0.02
Sales = P 1,035,000
Basic salary = P 10,000
Given :
Given & Solution
Gross Earnings = Basic Salary + Commission
=Basic Salary + ( Sales × Rate )
= P 10,000 + (P 1, 035, 000 × 0.02 )
= P 10,000 + P 20, 907
= P 30, 907
Solution :

12. Gross Earnings
( With Overrides )

13. Gross Earnings (W/ Basic Salary and Commission
Gross Earning = Basic Salary + Commission
= Basic Salary + Rate ( sales - Quota )
Formula :

14. Example :
Eugene Tito is a sales representative earning a
basic salary of P 18, 000 a month plus 3% commission on
his sales exceeding his quota of P 15, 000. Assume he
made a total sales of P 36, 000 for the current month. Find
his gross earnings.

15. Given & Solution
Commission rate = 3% = 0.03
Total Sales = P 36,000
Basic Salary = P 18, 000
Quota = P 15,000
Given:
Gross Earning = Basic Salary + Commission
= Basic Salary + Rate (Sales - Quota)
= P 18,000 + 0.03(P 36,000 - P15, 000)
= P 18,000 + 0.03(P 21, 000)
= P 18,000 + P 630
= P 18, 630
Solution :

16. Overrides

17. Gross Earnings (W/ Overrides)
Formula :
Gross Earning = Basic Salary + Commission + Overrides
= Basic Salary + ( Sales × Rate ) + ( Men's Sales × Override Rate )

18. Mr. Coronilia is a product manager with five
sales representatives under him. The company gives
him an annual salary of P 126, 000 ; Commission of 5%
on his own sales ; and an override of ½ % on his men's
sales is P 365, 000 with his men able to sell a total of P
1,548, 263 for the month.
Example :

19. Given :
Basic Salary = P 126, 000 ÷ 12 = P 10, 500
His sales = P 365, 500
His Men's Sales = P 1, 548, 263
His Commission Rate = 5% = 0.05
His Override Rate = ½% = 0.005

20. Solution :
Gross Earning = Basic Salary + Commission + Overrides
= Basic Salary + ( Sales × Rate ) + ( Men's Sales × Overrides )
= P 10, 500 + ( 365, 000 × 0.05 ) + ( P1, 548,263 × 0.005 )
= P 10, 500 + (P 18,275) + (P 7, 731.32)
= P 36,516.32