See how much commission this sale leaves.
Enter the sale price and the rate you apply; work out the buyer side and the seller side separately, VAT included.
For a letting, enter the monthly rent
Leave empty if you do not charge it
Leave empty if you do not charge it
According to your own situation
Enter the sale price and at least one side's rate; the total appears here.
You enter the rates yourself. The commission rate is set by the contract you make with the parties; enter the VAT rate according to your own situation too.
How sale commission is calculated
Commission is a percentage of the sale price. It can be taken from the buyer, from the seller or from both, and the rate does not have to be the same for the two sides.
Value added tax is added on top. What matters when the invoice is issued is the tax-inclusive amount, so seeing the VAT separately while calculating makes the job easier.
- One side's commission = sale price × rate
- VAT = that commission × VAT rate
- Amount to collect = commission + VAT
- Total income = buyer side + seller side
Commission on a letting
On a letting the commission is usually set as a multiple of the monthly rent rather than of a sale price. The common practice is one month's rent, but that too depends on the contract.
The arithmetic is the same: you set the amount and add the tax on top. You can use the tool by entering the monthly rent in the sale price field and the multiple you apply as a percentage in the rate field.
Getting the commission onto the record
Commission is easy to calculate and hard to track. Which sale it came from, who paid it and whether the invoice was issued all get muddled by month end.
The way to solve that is not to keep the commission apart from the sale. If the commission is recorded together with its party at the moment the sale is recorded, there is nothing to remember afterwards.
Frequently asked
- Is the commission rate set by law?
- The commission rate is settled by the contract between the parties. There are common practices in the market, but there is no single mandatory rate; that is why you enter the rate yourself.
- Can commission be taken from both the buyer and the seller?
- Yes, it can be taken from both sides. In the tool you can calculate the two sides separately and see the total.
- Why do I enter the VAT rate myself?
- Because the rate can change with the legislation and can differ by type of transaction, we do not write a fixed figure on the page. Enter the rate that fits your own situation.
- How many months' rent is the commission on a letting?
- The common practice is one month's rent, but that depends on the contract. To use the tool, enter the monthly rent in the amount field and the multiple you apply as a percentage in the rate field.
This tool does the arithmetic. The commission rate you apply depends on the contract you make with the parties, and the applicable VAT rate on tax legislation. Consult your accountant about your own tax position.
So you do not redo the calculation on every sale
In Bi'Emlak the commission sits on the sale's own record: who it was taken from, the amount and the state of its invoice, all together. When the sale is completed the invoices are created by themselves.
See commission tracking