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commission

kuh-MISH-un /kəˈmɪʃən/

nounverbB2IELTSTOEFLSAT

BusinessFinance

A sum of money paid to a salesperson for every sale that they make.

Commission is distinct from a salary; it is variable pay that directly rewards individual performance and results.

The story behind the word. From the Latin 'com-' (together) and 'mittere' (to send). It originally meant the act of entrusting someone with a task. In sales, it became the payment for successfully completing that entrusted task.

Word relationships

percentage: Percentage is the mathematical unit, while commission is the specific business term for that payment.
brokerage: Brokerage specifically refers to the fee charged by a broker for executing a transaction.

salary: A salary is a fixed regular payment, whereas commission fluctuates with sales volume.

Commonly confused with

bonus: A bonus is an extra payment for good performance; commission is a standard part of the pay structure per sale.

Word family

commissioner (noun): A person appointed to a role by a commission.

Collocations

earn a commission
sales commission
commission-based
straight commission

Idioms & expressions

out of commission

Example sentences

"Most real estate agents work on commission, earning a percentage of the final sale price." Explaining the compensation structure for real estate agents.
"He worked on commission, which meant his hunger was his greatest motivator." A classic quote regarding sales motivation.

Memory hook

Think 'Mission for Money'. Your mission is to sell, and the commission is the money you get for it. Mission accomplished, money earned.

When not to use

Do not use 'commission' to describe a flat hourly wage or a fixed annual salary.

Fun facts

In the 17th century, a 'commission' was a formal document granting authority to a military officer.