Commission = Net Sales × Rate ÷ 100 TDS (Sec 194H) = 5% if Commission > ₹15,000 Net Payout = Commission − TDS Referral Earnings = Conversions × Commission per Deal
Typical Commission Rates by Industry
Industry
Typical Rate
Note
FMCG / Distribution
2–5%
Volume-based
Insurance
20–35%
First year premium
Real Estate
1–2%
Property value
SaaS / Software
8–15%
Recurring deals
Manufacturing
3–8%
Product-based
★★★★★
"The TDS auto-calculation saved me from under-deducting. I was paying agents ₹40K+ without cutting TDS — this caught it and I filed the corrections."
Rajan Kapoor — Trading company, Ahmedabad
★★★★★
"I use the tiered calculator to design our quarterly incentive structure. Set Tier 1 at 5% and Tier 2 at 12% — the jump at ₹5L pushes reps to exceed targets."
Sneha Pillai — Sales head, Pune
★★★★☆
"Referral calculator helps me estimate affiliate payouts before I set program terms. Very useful for planning marketing budget."
Mohit Verma — E-commerce founder, Hyderabad
Need TDS Filing or GST Registration Help?
Our CA team handles TDS returns, commission agreements, and GST registration for agents — starting at ₹999.
Under Section 194H, TDS is deducted at 5% on commission/brokerage payments exceeding ₹15,000 in a financial year. The payer deducts TDS before paying the agent and deposits it with the government. The agent can claim this TDS as tax credit when filing their income tax return.
How is sales commission calculated?+
Commission = Net Sales × Rate ÷ 100. Net Sales = Gross Sales − Returns and deductions. If commission exceeds ₹15,000, TDS @ 5% is deducted. Net Payout = Commission − TDS. Use ex-GST sales unless your agreement says otherwise.
Is GST applicable on commission income?+
Yes — commission income is a taxable supply at 18% GST. If annual commission income exceeds ₹20 lakh (₹10 lakh in special states), GST registration is mandatory. Agents must issue tax invoices and file GST returns. ClearlyComply can handle GST registration from ₹999.
What is a tiered commission structure?+
Tiered commissions pay different rates at different sales levels — e.g., 5% up to ₹1L, 10% on ₹1L–₹5L, 15% above ₹5L. This incentivizes sales teams to push beyond base targets. Our calculator handles two tiers with a 15% default above Tier 2.
Should I deduct TDS on every commission payment?+
TDS applies when cumulative commission to one person in a financial year crosses ₹15,000. Even if a single payment is small, track cumulative amounts. Once you cross ₹15,000, deduct TDS going forward. File TDS returns quarterly (Form 26Q) and issue Form 16A to the agent.