What is Commission? Definition or Meaning

Selling for a living can be difficult at times. But if you do manage to sell something, the financial reward you get for it is called a commission. Usually, this is a percentage of the profit price. In some cases, employers may adopt a sliding scale commission, where they pay a higher percentage in commission after a particular target, increasing it as they continue to sell, up to a cap.

For example…

Car sales people are perfect to exemplify a commission. I’m sure you appreciate that selling cars is not as easy as selling milk. Subsequently, to reward salespeople, car dealers pay anywhere between twenty percent and forty percent of the profit made on the sale. So, if Joe the car salesman sells a brand new Toyota Corolla for twenty four thousand dollars and the profit made by the car dealer is, say two thousand dollars, taking a thirty percent commission, Joe would earn six hundred dollars for the sale.