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hscscience Maths Std · Y11
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Module 3 · L3 of 14 ~50 min MS-F1 ⚡ +90 XP available

Commission, Piecework and Leave Loading

Calculate earnings for workers paid by results. Tiered commission applies each rate only to its slice of sales, never the top rate to the full total. Leave loading is 17.5% of 4 weeks' ordinary pay, not of annual salary.

Today's hook, Imagine you're a real estate agent who just sold a $\$1.2$ million house. You don't get paid an hourly wage for that, you get a cut of the sale price. But what happens in a slow month when nothing sells?
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Recall, your gut answer first

Three printable worksheets that build from foundations to mastery, or build your own from any module’s questions.

Worksheets

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Three printable worksheets that build from foundations to mastery, or build your own from any module’s questions.

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01
Recall, your gut answer first
+5 XP warm-up

Imagine you're a real estate agent who just sold a $\$1.2$ million house. You don't get paid an hourly wage, you get a cut of the sale price. But what happens in a slow month when nothing sells? And what about factory workers paid per item they produce, is it fair that a faster worker earns more than a slower one doing the same job? These payment systems reward output, not time. Before we do the maths, think: what are the advantages and risks of being paid this way?

Before calculating write your gut feeling. We will revisit this at the end of the lesson.

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02
The key relationships you need to own
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Three distinct payment models: commission (% of sales), piecework (quantity × rate per unit), and leave loading (17.5% of 4 weeks' ordinary pay). The key skill is identifying the model before calculating.

Flat commission: $C = S \times r$ (convert % to decimal). Retainer + commission: $R + (S \times r)$. Piecework: $n \times r_p$. Leave loading: $0.175 \times (W \times 4)$. Tiered commission: apply each rate only to sales within that tier.

Formulas for commission and leave loading.
Tiered commission: each rate applies only to its slice of sales
% to decimal first
3.5% = 0.035. Multiplying by 3.5 instead of 0.035 gives an answer 100× too large, a very common error.
Tiered: slice not total
In a tiered structure, never apply the top rate to the full sales total. Calculate each tier's slice separately, then add.
Leave: 4 weeks not annual
Leave loading is 17.5% of 4 weeks' ordinary pay. Using annual salary gives an answer 13× too large.
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What you will master
Know

Key facts

  • The formulas for flat commission, retainer + commission, and tiered commission
  • The piecework formula: items × rate per item
  • That leave loading is 17.5% of 4 weeks' ordinary pay
Understand

Concepts

  • Why tiered commission applies each rate only to its slice, not to the full total
  • Why leave loading is based on 4 weeks' pay, not the annual salary
  • How to convert a percentage rate to a decimal before multiplying
Can do

Skills

  • Calculate flat and retainer-based commission earnings
  • Work through a tiered commission structure step by step
  • Calculate piecework pay and annual leave loading
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Key terms
CommissionPayment calculated as a percentage of sales made.
PieceworkPayment based on the number of items produced or tasks completed.
Leave LoadingAn extra payment (17.5%) on top of normal pay during annual leave.
RetainerA fixed regular payment plus commission, common in real estate and sales roles.
Tiered CommissionA structure where different commission rates apply to different slices of total sales.
RoyaltyPayment to the owner of intellectual property based on sales or usage.
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Commission, flat and retainer-based

A flat commission means the worker earns only a percentage of their total sales, there is no guaranteed base.

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Commission, flat and retainer-based
core concept

A flat commission means the worker earns only a percentage of their total sales, there is no guaranteed base. For example, a commission rate of 3.5% on $\$45,000$ of sales gives $\$45,000$ × 0.035 = $\$1{,}575$.

A retainer plus commission means the worker receives a fixed weekly or monthly retainer plus a percentage of sales on top. In HSC questions, always check whether the commission is applied to total sales or only to sales above a threshold read carefully.

Convert the percentage to a decimal before multiplying: 3.5% = 0.035, not 3.5. Multiplying by 3.5 instead of 0.035 gives an answer 100 times too large.
Common error, Commission on total sales vs sales above threshold: Some questions say "5% commission on all sales above $\$10,000$." This means you subtract $\$10,000$ first, then apply 5%. Applying 5% to the full figure is a very common and costly error.

Flat commission: earnings = rate% × total sales. Retainer plus commission: earnings = retainer + (rate% × sales). No guaranteed minimum with flat commission. Always multiply by the decimal form of the percentage.

Pause, copy the flat commission formula (earnings = rate% × total sales) and the retainer-plus-commission formula (earnings = retainer + rate% × sales), and note that with flat commission there is no guaranteed minimum into your book.

Quick check: A commission rate of 4.5% as a decimal is:

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Tiered commission, split by slice

We just saw flat commission (earnings = rate% × total sales) and retainer-plus-commission (fixed retainer + rate% × sales).

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Tiered commission, split by slice
core concept

We just saw flat commission (earnings = rate% × total sales) and retainer-plus-commission (fixed retainer + rate% × sales). That raises a question: what if a company applies a higher commission rate to sales above a threshold, how do you calculate pay when different portions of sales attract different rates? This card answers it → tiered commission splits sales at each boundary; only the sales within each tier are multiplied by that tier's rate, then all tier amounts are summed.

Tiered commission applies different rates to different portions of total sales. For example: 2% on the first $\$20,000$, 3.5% on the next $\$30,000$ (up to $\$50,000$), and 5% on any sales above $\$50,000$.

If a salesperson achieves $\$65{,}000$ in sales, you do NOT apply 5% to the whole $\$65{,}000$. Calculate each tier separately:

Tier Sales in tier Rate Commission earned
Tier 1$\$20{,}000$2%$\$400$
Tier 2$\$30{,}000$3.5%$\$1{,}050$
Tier 3$\$15{,}000$5%$\$750$
Total$\$65{,}000$$\$2{,}200$
Each rate applies only to the sales within its slice.
Common error, Don't apply the top rate to total sales: Applying 5% to the full $\$65,000$ gives $\$3,250$, $\$1,050$ more than the correct answer of $\$2,200$. Tiered means each rate applies only to the slice of sales in that tier.

Tiered commission: apply each rate only to the sales within that tier’s range. For sales above tier 1: multiply (sales − tier 1 limit) × higher rate, then add the tier 1 amount. Build a running total tier by tier.

Pause, copy the tiered commission method: identify each tier boundary, multiply only the sales within each tier by that tier's rate, and sum the tier amounts, never apply the highest rate to the full sales figure into your book.

True or false: Leave loading is calculated as 17.5% of the worker's annual salary.

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Worked examples · 4 in a row, reveal as you go

Worked examples · 4 in a row, reveal as you go

Worked examples · 4 in a row, reveal as you go

PROBLEM 1 · RETAINER + COMMISSION

Daniela works as a car salesperson. She receives a weekly retainer of $\$620$ and a commission of 2.8% on all sales. In one week she sells $\$84,000$ worth of cars. Calculate her total earnings for the week.

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$\text{Commission} = \$84{,}000 \times 0.028 = \$2{,}352.00$
Convert 2.8% to 0.028 and multiply by total sales
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PROBLEM 2 · TIERED COMMISSION

James earns commission on a tiered structure: 3% on the first $\$15,000$ of monthly sales, 4.5% on sales from $\$15,001$ to $\$40,000$, and 6% on sales above $\$40,000$. In March he achieves $\$55{,}000$ in sales. Calculate his total commission.

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$\text{Tier 1} = \$15{,}000 \times 0.03 = \$450.00$
First $\$15{,}000$ at 3%
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PROBLEM 3 · LEAVE LOADING

Wei earns $\$1{,}240$ per week in ordinary time. Calculate his annual leave loading.

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$\text{4 weeks' ordinary pay} = \$1{,}240 \times 4 = \$4{,}960.00$
Leave loading is based on 4 weeks' ordinary pay
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PROBLEM 4 · PIECEWORK

A farm worker is paid $\$2.35$ per crate of strawberries picked. In one shift they pick 186 crates. Calculate the worker's pay for the shift.

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$\text{Piecework pay} = 186 \times \$2.35$
Use quantity × rate per item
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Fill the gap: An employee earns $\$980$ per week. Their annual leave loading is $\$$ (4 weeks' pay × 17.5%).

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Common errors · the 3 traps that cost marks

Common errors · the 3 traps that cost marks

Common errors · the 3 traps that cost marks

Trap 01
Not converting % to decimal
$\$910{,}000$ × 2.2 = $\$2{,}002{,}000$. $\$910{,}000$ × 0.022 = $\$20{,}020$. The difference is a factor of 100, always write the decimal form before multiplying.
Trap 02
Applying top tier rate to all sales
Applying 5% to the full $\$65,000$ gives $\$3,250$ instead of the correct $\$2{,}200$. In tiered structures, each rate only applies to its slice.
Trap 03
Leave loading on annual salary
Using annual salary ($\$980$ × 52 = $\$50{,}960$) instead of 4 weeks' pay ($\$980$ × 4 = $\$3{,}920$) inflates the answer by a factor of 13.

Match the payment type to its description:

  • Commission
  • Piecework
  • Leave loading
  • Retainer
  • 17.5% of 4 weeks' pay
  • fixed base + commission
  • % of sales value
  • quantity × rate per item
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Revisit your thinking

Quick-fire practice · 3 calculations

Quick-fire practice · 3 calculations

1

A salesperson receives a retainer of $\$540$ plus 3.2% commission on sales. In one week, they make $\$48,000$ in sales. Calculate their total earnings.

2

A worker is paid $\$2.45$ per box packed. They pack 172 boxes in a day. Calculate the day's pay.

3

An employee earns $\$1{,}120$ per week in ordinary time. Calculate the annual leave loading paid on 4 weeks of leave.

Top 3 list: Write THREE key decisions you need to make before calculating commission (e.g. identifying whether it is flat, tiered, or on sales above a threshold).

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Revisit your thinking

Look back at what you wrote in the Think First section. The real estate agent earns nothing in a slow month under flat commission, but a retainer structure would provide a base. Piecework rewards speed but can disadvantage workers during machinery breakdowns or poor harvests, factors outside their control.

What has changed? What did you get right? What surprised you?

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Show what you have learned

Multiple choice, then short answer under exam conditions.

01
Multiple choice
+5 XP per correct · +25 XP all-correct

Pick your answer, then rate your confidence. Each retry pulls a fresh mix from the bank.

02
Short answer
ApplyBand 32 marks

SA 1. A salesperson receives a retainer of $\$540$ plus 3.2% commission on sales. In one week, they make $\$48,000$ in sales. Calculate their total earnings. (2 marks)

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ApplyBand 31 mark

SA 2. A worker is paid $\$2.45$ per box packed. They pack 172 boxes in a day. Calculate the day's pay. (1 mark)

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ApplyBand 32 marks

SA 3. An employee earns $\$1{,}120$ per week in ordinary time. Calculate the annual leave loading paid on 4 weeks of leave. (2 marks)

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Comprehensive answers (click to reveal)

Drill 1: Commission = $\$48{,}000$ × 0.032 = $\$1{,}536$. Total = $\$540$ + $\$1{,}536$ = $\$2{,}076.00$

Drill 2: 172 × $\$2.45$ = $\$421.40$

Drill 3: 4 weeks' pay = $\$1{,}120$ × 4 = $\$4{,}480$. Loading = $\$4{,}480$ × 0.175 = $\$784.00$

SA 1 (2 marks): Commission = $\$1,536$ [1]; total = $\$2,076$ [1]

SA 2 (1 mark): 172 × $\$2.45$ = $\$421.40$ [1]

SA 3 (2 marks): 4 weeks' pay = $\$4,480$ [1]; loading = $\$4,480$ × 0.175 = $\$784$ [1]