Commission Calculator

Commission = Sale value × Commission% ÷ 100

Net payout = Commission − TDS

Retained = Sale value − Commission

Commission on brokerage attracts TDS under section 194H, generally at 5%.

A ₹2,50,000 sale with 5% commission means ₹12,500 commission, ₹625 TDS at 5% and a ₹11,875 payout, leaving ₹2,37,500 with the business.

Commission is the most common variable-pay structure in Indian trade, and the structure matters as much as the rate. Commission on sale value is simple to administer but rewards volume even when it is discounted; commission on gross profit protects margin and keeps the agent aligned with pricing discipline. Slab structures — a base rate up to a target and a higher rate beyond it — work well where you want to push for growth without inflating the cost of routine business.

TDS under section 194H applies at 5% on commission and brokerage once yearly payments to that agent cross the threshold, and the deduction is your responsibility as the payer. A GST-registered agent will also raise a tax invoice for the commission, and the GST charged there is input credit for you, so the net cost of the commission is lower than the headline figure suggests.

Write the base into the agreement explicitly: gross value or taxable value, before or after discount, on booking or on collection. Most commission disputes come from an unstated assumption rather than a disputed rate, and paying on collection rather than on booking keeps your cash flow aligned with the payout.