Commission Rules & Calculation
Comprehensive guide to agent commission calculation.
General Rules
| Rule | Value |
|---|---|
| Default Commission | 15% (configurable per agent) |
| Calculation Basis | Net Amount (excluding VAT) |
| Transport | Not commissionable (if excluded) |
| Pickup | Not commissionable (if excluded) |
| VAT on Commission | Not applied in Phase 1 |
| Maximum Commission | No limit enforced |
Calculation Formula
Scenario 1: Exclude Transport = TRUE
If No Pickup:
Commission = (Booking Net Total - Transport Cost) × (Commission % ÷ 100)
If Pickup Available:
Commission = (Booking Net Total - Transport Cost - Pickup Cost) × (Commission % ÷ 100)
Scenario 2: Exclude Transport = FALSE
Commission = Booking Net Total × (Commission % ÷ 100)
Calculation Examples
Example 1: Standard Booking (No Transport Exclusion)
Setup:
- Agent Commission: 15%
- Booking Net Total: £1,000
- VAT: £200
- Exclude Transport: No
Calculation:
Commission = £1,000 × 0.15
Commission = £150
Final Amounts:
Booking Subtotal: £1,000
VAT (20%): £200
Gross Total: £1,200
Commission (15%): -£150
───────────────────────
Total Payable: £1,050
Example 2: Sailing Trip (Transport Excluded)
Setup:
- Agent Commission: 15%
- Booking Net Total: £2,000
- Transport Cost: £500
- Pickup Cost: £100
- Exclude Transport: Yes
Calculation:
Commissionable Amount = £2,000 - £500 - £100
Commissionable Amount = £1,400
Commission = £1,400 × 0.15
Commission = £210
Final Amounts:
Booking Subtotal: £2,000
(Transport: £500)
(Pickup: £100)
VAT (20%): £400
Gross Total: £2,400
Commission (15%): -£210
───────────────────────
Total Payable: £2,190
Example 3: Transport Excluded (No Pickup)
Setup:
- Agent Commission: 20%
- Booking Net Total: £1,500
- Transport Cost: £400
- Pickup Cost: £0
- Exclude Transport: Yes
Calculation:
Commissionable Amount = £1,500 - £400
Commissionable Amount = £1,100
Commission = £1,100 × 0.20
Commission = £220
Final Amounts:
Booking Subtotal: £1,500
(Transport: £400)
VAT (20%): £300
Gross Total: £1,800
Commission (20%): -£220
───────────────────────
Total Payable: £1,580
Example 4: High Commission Agent
Setup:
- Agent Commission: 25%
- Booking Net Total: £3,000
- Exclude Transport: No
Calculation:
Commission = £3,000 × 0.25
Commission = £750
Final Amounts:
Booking Subtotal: £3,000
VAT (20%): £600
Gross Total: £3,600
Commission (25%): -£750
───────────────────────
Total Payable: £2,850
Booking Level Representation
How Commission Appears
Commission is displayed as:
- Negative amount (shows reduction)
- Visible in agent confirmation email
- Included in sales reports
- Posted to accounting
Example Booking Display
Booking #BK-2024-001234
Services:
- Tour Package: £1,000.00
- Transport: £300.00
- Accommodation: £200.00
──────────
Subtotal: £1,500.00
VAT (20%): £300.00
──────────
Gross Total: £1,800.00
Agent Commission (15%): -£225.00
══════════
Total Payable: £1,575.00
Commission Visibility
Where Commission Appears
-
Agent Booking Confirmation
- Shown as line item
- Negative amount format
-
Sales Report
- Separate column: "Agent Commission"
- Filterable by agent
-
Accounting System
- Posted to Agent Commission Account
- After departure processing
-
Booking Summary
- Visible to agent in portal
- Not visible to end customer
Important Notes
Negative Display
Commission is always shown as a negative value to represent a discount/reduction from the booking total.
VAT on Commission
VAT on commission is not calculated in Phase 1. Future versions will support this feature.
No Commission Cap
There is no maximum commission limit enforced by the system. However, business rules should be established for reasonable limits.
Quick Reference
Decision Tree
Is Transport Excluded?
├─ NO → Commission = Net Total × %
└─ YES → Is there Pickup?
├─ NO → Commission = (Net Total - Transport) × %
└─ YES → Commission = (Net Total - Transport - Pickup) × %
Formula Summary
| Scenario | Formula |
|---|---|
| Standard | Net × % |
| Transport Excluded (No Pickup) | (Net - Transport) × % |
| Transport Excluded (With Pickup) | (Net - Transport - Pickup) × % |
Next Steps
- Learn about Accounting Entries
- Understand Agent Portal Access