Introduction to Commission
🤝 What is an Agent?

An agent is a person who acts as an intermediary between a seller and a buyer of goods and services. The agent does not own the goods — they simply help complete the deal between two parties.

🏠
Seller
Dhaniram
goods/services⇄
🤝
Agent
Sabina
payment⇄
🧑
Buyer
Aadinath
💰 What is Commission?

Commission is the amount (fee) that an agent receives for their service — calculated as a certain percentage of the sale price.

📌 The sale price (also called selling price) is the basis for calculating commission. Commission is always expressed as a percentage (%).

🌍 Where is Commission Used?
  • 🏘️ Land & property transactions
  • 🏦 Banks & financial institutions
  • 🛡️ Insurance companies
  • 🛒 Buying and selling goods
  • 📈 Stock market (shares & securities)
Commission Formulas
📐 Formula 1 – Find Commission Amount
Commission = Commission Rate  ×  Sale Price100
Use this when you know the commission rate (%) and the sale price. You want to find how much money the agent earns.
📐 Formula 2 – Find Commission Rate
Commission Rate (%) = Commission  ×  100Sale Price
Use this when you know the commission amount and the sale price. You want to find what percentage the agent charges.
📐 Formula 3 – Find Sale Price from Commission
Sale Price = Commission  ×  100Commission Rate
Use this when you know the commission amount and the commission rate. You want to find the actual sale price of the goods.
📐 Formula 4 – Amount Received by Seller
Seller's Amount  =  Sale Price  −  Commission
After paying the agent's commission, this is how much money the seller actually keeps.
🔤 Variable Key
SP = Sale Price (Rs.)
C = Commission Amount (Rs.)
R = Commission Rate (%)
SA = Seller's Amount
Examples
Example 1 of 3
An agent receives 5% commission by selling a land for Rs. 25,00,000.
(a) How much amount does the agent receive as commission?
(b) How much does the land owner receive after the commission?

✏️ SOLUTION

Given: Sale Price = Rs. 25,00,000  |  Commission Rate = 5%

(a) Commission Amount

1
Apply the formula: Rate  ×  SP100 = Commission
2
Substitute values: 5  ×  25,00,000100
3
Calculate: 1,25,00,000100 = Rs. 1,25,000
✅ Agent's Commission = Rs. 1,25,000

(b) Amount Received by Land Owner

1
Formula: Seller's Amount = Sale Price − Commission
2
Substitute: = 25,00,000 − 1,25,000
3
Result: = Rs. 23,75,000
✅ Land Owner Receives = Rs. 23,75,000
Example 2 of 3
A motorcycle showroom has 10 employees who each get Rs. 20,000 as monthly salary. They earn 0.25% commission on total monthly sales. If the total transaction in Asoj is Rs. 1,35,00,000, how much total commission does the showroom receive in a sale of Rs. 60,00,000?

✏️ SOLUTION

Given: Rate: 0.5% up to Rs.15L, 1.5% up to Rs.20L, 2% above Rs.20L  |  SP = Rs. 60,00,000

1
Identify slab: Sale price of Rs.60L falls in multiple slabs based on ceiling commission structure.
2
Commission on first Rs.15,00,000 at 0.5%: 0.5  ×  15,00,000100 = Rs. 7,500
3
Commission on next Rs.5,00,000 (15L→20L) at 1.5%: 1.5  ×  5,00,000100 = Rs. 7,500
4
Commission on remaining Rs.40,00,000 (above 20L) at 2%: 2  ×  40,00,000100 = Rs. 80,000
5
Total Commission: 7,500 + 7,500 + 80,000 = Rs. 95,000
✅ Total Commission on Sale of Rs. 60,00,000 = Rs. 95,000
Example 3 of 3
Monthly salary of a staff in a bookshop is Rs. 34,000. If she books the total sales of the month of Baisakh of Rs. 7,25,000, and earns Rs. 30,000 as commission on total sales, what is the total income of the staff for the month of Baisakh?

✏️ SOLUTION

Given: Monthly Salary = Rs. 34,000  |  Total Sales = Rs. 7,25,000  |  Commission = Rs. 30,000

1
Find Commission Rate: 30,000  ×  1007,25,000
2
Calculate rate: 30,00,0007,25,000 ≈ 4.14%
3
Total income = Salary + Commission: 34,000 + 30,000
4
Result: = Rs. 64,000
✅ Total Income of Staff in Baisakh = Rs. 64,000
Solved Questions