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Tiered Commission Calculator

Calculate commission earnings across volume-based tier structures with escalating rates.

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How Do Tiered Commission Structures Work?

Many funders and ISOs use tiered commission structures that reward higher volume with better rates. Instead of a flat percentage on all deals, your commission rate escalates as your monthly funded volume crosses predetermined thresholds. For example: 8% on the first $250K, 10% on the next $250K, and 12% on everything above $500K. This is a marginal system -- the higher rate only applies to volume in that tier, not retroactively to all volume. Knowing the tier math lets you calculate your blended rate and see how close you are to the next tier -- where every additional dollar funded earns you more. It also helps you decide whether pushing for that last deal of the month is worth the effort to hit the next tier.

How to Use This Calculator

Enter your monthly funded volume

Use your total funded amount across all deals for the month. Include all deals that count toward your funder's tier calculation.

Configure the tier thresholds and rates

Get these from your funder rate sheet. The thresholds define the breakpoints and the rates apply to volume within each band. Set them to match your specific agreement.

Review the per-tier and effective rate breakdown

The effective rate is your total commission divided by total volume. This is the number to compare against flat-rate offers from other funders.

Key Concepts

Marginal Tier

Each tier rate applies only to the volume within that band. The first $250K earns 8% regardless of how much total volume you do. This is how tax brackets work too.

Effective Rate

Your blended commission rate across all tiers. Total commission divided by total volume. The effective rate is always between your lowest and highest tier rate.

Tier Breakpoint

The volume threshold where the next tier kicks in. Knowing your breakpoints helps you decide whether to push for one more deal to cross into a higher tier.

Expert Insights

End-of-Month Tier Optimization: If you are $30K below a tier breakpoint at month-end, pulling forward a deal from next month or pushing a borderline submission can be worth thousands in additional commission. A $500K volume month at 10% effective rate versus a $470K month at 9.5% effective rate is a $2,650 difference. Track your tier progress weekly, not just at month-end.

Comparing Tiered vs. Flat Rate Offers: A funder offering a flat 10% on all volume may be better than a tiered structure if your volume is inconsistent. In months where you fall short of higher tiers, the flat rate wins. Run both scenarios with your actual volume history to see which structure pays more across a 6-month period.

Frequently Asked Questions

In most funder agreements, no. Tiers are marginal -- the higher rate applies only to volume above the threshold, not retroactively. However, some funders offer "retroactive" or "waterfall" tiers where hitting a threshold upgrades your rate on ALL volume that month. Always clarify which structure your agreement uses.

You earn the lower-tier rate on all volume up to the threshold. There is no partial credit. This is why end-of-month deal management matters. If you are $20K short, a small deal that earns $1,600 in commission might trigger an additional $5,000+ in higher-tier earnings on your existing volume (if the tier is retroactive).

Yes. If your volume consistently falls just below a tier, ask the funder to lower the threshold. Provide 3-6 months of volume data showing your pattern. Funders would rather lower a threshold to keep you engaged than lose your deal flow to a competitor with better tiers.

Results are estimates for educational purposes only. Actual amounts may vary based on your specific financial situation, market conditions, and other factors. This calculator does not constitute financial advice.