Commission — Payroll Definition

Commission paystub meaning: Earnings based on a percentage of sales you generate, common in sales roles. Codes: COMM. Learn where it appears and how it...

Earnings based on a percentage of sales you generate, common in sales roles.

A commission is a form of variable pay calculated as a percentage of sales revenue or profit. Common structures include straight commission (100% commission, no base salary), base + commission, tiered commission (higher percentage at higher sales levels), and draw against commission. Commissions are subject to all standard payroll taxes including FICA and income tax withholding.

Earnings lines should identify the applicable rate, hours or units, current amount, and year-to-date total. Reconcile them with time records, the pay period, the employment agreement, and the employer-issued statement.

When this term appears on a statement, read its label, current amount, year-to-date amount, pay-period context, and any adjacent rate or hours together. Resolve a mismatch with the original issuer or the cited authority rather than changing a record to force a preferred result.