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Calculate earnings for workers paid by results, including commission structures, piecework rates, and annual leave loading.
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? 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?
Type your initial response below — you will revisit this at the end of the lesson.
Write your initial response in your book. You will revisit it at the end of the lesson.
Come back to this at the end of the lesson.
Wrong: Commission is always calculated as a percentage of total sales.
Right: Commission can be a flat rate per item (piecework), a percentage of sales, or a retainer plus commission. Different industries use different structures.
Core Content
Commission pays workers a percentage of the value of sales they make, linking income directly to performance.
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 $1,575.
A retainer plus commission means the worker receives a fixed weekly or monthly retainer (a guaranteed base amount) plus a percentage of sales on top. This is more common in roles where sales can be unpredictable. The retainer provides income security; the commission provides incentive.
In HSC questions, always check whether the commission is applied to total sales or only to sales above a threshold — read carefully.
Tiered commission applies different rates to different portions of total sales, rewarding higher performers with progressively better rates on their upper-tier sales.
A tiered commission structure might look like: 2% on the first $20,000 of sales, 3.5% on sales from $20,001 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. Instead, 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 |
Piecework pays per item produced; leave loading is a bonus paid on top of annual leave pay to compensate workers for lost penalty rates during holidays.
Piecework is common in manufacturing, agriculture, and some creative industries. The pay is simply: number of items × rate per item. For example, picking 340 kg of fruit at $1.85/kg = $629.00.
Leave loading is 17.5% of four weeks' ordinary pay. It exists because workers on annual leave cannot earn overtime or penalty rates — the 17.5% partially compensates for this. The calculation:
This loading is paid in addition to the normal leave pay, not instead of it.
Write one sentence summarising the main mathematical idea of this section.
The hardest part of this topic is often deciding which model the question is describing before you start calculating.
Use the wording of the question as your guide. If the payment is based on a percentage of sales, it is a commission problem. If payment depends on the number of items produced, it is piecework. If the question refers to annual leave and a 17.5% bonus, it is leave loading. Once you identify the model, the calculations become much more manageable.
| If the question says... | Think... | Main action |
|---|---|---|
| "x% of sales" | Commission | Multiply sales by decimal rate |
| "retainer plus x%" | Retainer + commission | Add fixed amount after commission |
| "first... then..." | Tiered commission | Split the sales into tiers |
| "per item", "per kg", "per box" | Piecework | Quantity × rate per unit |
| "17.5% of 4 weeks' pay" | Leave loading | Find 4 weeks' pay, then multiply by 0.175 |
Write one sentence summarising the main mathematical idea of this section.
Worked Examples
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.
Write one sentence summarising the main mathematical idea of this section.
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.
Write one sentence summarising the main mathematical idea of this section.
Wei earns $1,240 per week in ordinary time. Calculate his annual leave loading.
Write one sentence summarising the main mathematical idea of this section.
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.
Write one sentence summarising the main mathematical idea of this section.
Look back at what you wrote in the Think First section. What has changed? What did you get right? What surprised you?
A commission, piecework and leave loading problem requires you to analyse data, perform calculations, and interpret the result in context. Show all working and justify each step.
Check Your Understanding
Select the best answer for each question. Feedback appears after you choose.
5 random questions from a replayable lesson bank — feedback shown immediately
A worker's tiered commission is 4% on the first $20,000 and 7% on sales above $20,000. They achieve $35,000 in sales. What is their total commission?
An employee earns $980 per week. What is their annual leave loading?
A worker is paid $1.80 per item produced. If they complete 245 items, what is their piecework pay?
These are ideal HSC-style short-answer questions because each one tests whether you can identify the model before calculating.
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.
A worker is paid $2.45 per box packed. They pack 172 boxes in a day. Calculate the day's pay.
An employee earns $1,120 per week in ordinary time. Calculate the annual leave loading paid on 4 weeks of leave.
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Play Asteroid Blaster →Move fast, but watch for the model each question is testing.
What decimal should be used for a commission rate of 4.5%?
Why must tiered commission be split into brackets?
A worker is paid $3.20 per item and completes 90 items. What is the pay?
Leave loading is best described as: