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Tiered Pricing Formula

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    Tiered Pricing Formula

    Hi everyone! New here and hoping for some help on a formula.

    I'm in need of a formula to calculate commissions based on a tiered rate structure.

    The tiers are:

    Tier 1: between $1 to $40,000 | Commission rate is 9.23%
    Tier 2: between $40,001 to $60,000 | Commission rate is 6.46%
    Tier 3: between $60,001 to NO CAP | Commission rate is 1.85%

    So, if the sale was for $65,000, the first $40,000 is paid at a 9.23% | the next $20,000 is paid at a 6.46% rate | anything in excess of $60,000 is paid at a 1.85% rate.
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    Re: Tiered Pricing Formula

    Welcome to the forum.

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    Administrator 6StringJazzer's Avatar
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    Re: Tiered Pricing Formula

    U.S. federal income tax works the same way. Here is an implementation that I tweaked to match to your situation.

    Note that I did not add $1 to go to the next tier. As a general rule you do not want a gap of any amount between tiers. Instead of "from" I used "over".

    Values as displayed
    A
    B
    C
    D
    1
    Sale Amount
    Commission
    2
    $ 65,000.00
    $ 5,076.50
    3
    4
    Over
    Up to
    5
    $ -
    $ 40,000
    9.23%
    $ 3,692.00
    6
    $ 40,000
    $ 60,000
    6.46%
    $ 1,292.00
    7
    $ 60,000
    1.85%
    $ 92.50
    8
    Total Commission
    $ 5,076.50
    Commission


    Underlying formulas
    A
    B
    C
    D
    1
    2
    =D8
    3
    4
    5
    =C5*MIN($A$2,B5)
    6
    =B5
    =MAX(0,C6*(MIN($A$2,B6)-A6))
    7
    =B6
    =MAX(0,C7*($A$2-A7))
    8
    =SUM(D5:D7)
    Jeff
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