6.6: Tax, Tip, Discount, & Commission

Front

What is commission?

Back

Commission is the amount of money a person earns when they sell something. It does not include the cost of the item being sold.

Front

How do you calculate commission?

Back

To calculate commission, multiply the total sales amount by the commission rate (as a decimal). For example, if the sales are $36,750 and the commission rate is 8%, the commission is $36,750 x 0.08 = $2,940.

Front

What is tax?

Back

Tax is a percentage of the cost that is added to the total price of an item.

Front

How do you calculate tax on an item?

Back

To calculate tax, multiply the cost of the item by the tax rate (as a decimal). For example, for a $25 dress with a 7% tax, the tax is $25 x 0.07 = $1.75.

Front

What is a tip?

Back

A tip is a small amount of money given to someone for their service, usually calculated as a percentage of the total bill.

Front

How do you calculate a tip?

Back

To calculate a tip, multiply the total bill by the tip percentage (as a decimal). For example, for a $50 bill with a 15% tip, the tip is $50 x 0.15 = $7.50.

Front

What is a discount?

Back

A discount is a reduction in the price of an item, usually expressed as a percentage of the original price.

Front

How do you calculate a discount?

Back

To calculate a discount, multiply the original price by the discount rate (as a decimal) and subtract that amount from the original price. For example, a 20% discount on a $100 item is $100 x 0.20 = $20, so the sale price is $100 - $20 = $80.

Front

What is the difference between gross pay and net pay?

Back

Gross pay is the total amount earned before any deductions (like taxes or commissions), while net pay is the amount received after deductions.

Front

If Sal sells $36,750 worth of cars and earns 8% commission, how much does he earn?

Back

Sal earns $2,940 in commission.