How it works
Whether you are a real estate broker calculating the statutory 2.5% fee, an e-commerce merchant estimating marketplace platform fees, an affiliate marketer tracking referrals, or a sales manager computing monthly rep payouts, accurate commission accounting requires separating the base commission, the VAT charged on the service fee, and whether the fee is deducted from the seller’s payout or added to the buyer’s invoice.
Standard Commission & Brokerage Rates Across Industries
The reference table below shows typical commission percentages and how VAT affects the total brokerage cost on a 100,000 deal:
| Industry / Transaction Type | Typical Commission Rate | Base Fee on 100,000 | Total Fee with 15% VAT |
|---|---|---|---|
| Saudi Real Estate Brokerage (REGA Cap) | 2.50% of sale or 1st year rent | 2,500.00 | 2,875.00 |
| UAE / Dubai Property Agency Fee | 2.00% of property sale price | 2,000.00 | 2,100.00 (at 5% VAT) |
| Automotive & Equipment Dealerships | 1.50% to 3.00% | 2,000.00 (at 2%) | 2,300.00 |
| B2B SaaS & Enterprise Sales Reps | 8.00% to 12.00% of ACV | 10,000.00 (at 10%) | 11,500.00 |
| E-Commerce Marketplaces & App Stores | 10.00% to 15.00% | 15,000.00 (at 15%) | 17,250.00 |
Two Accounting Modes: Deduct from Seller vs. Add to Buyer
- Deduct Commission from Seller Proceeds: Used by payment gateways, e-commerce marketplaces, and seller-paid real estate agreements. The platform or broker subtracts the commission (plus VAT on commission) from the gross sale amount and remits the net balance to the seller.
- Add Commission to Buyer Total: Used in buyer-paid real estate transactions and auction houses. The buyer pays the full deal price plus the brokerage commission and VAT on commission.
A transaction closes for 500,000 with a 2.5% brokerage commission and 15% VAT on the brokerage service:
- Base Commission (Before VAT): 500,000 × 2.5% = 12,500.00.
- VAT on Commission (12,500 × 15%): 1,875.00.
- Total Commission Including VAT: 12,500 + 1,875 = 14,375.00 (2.875% of the deal).
- If Deducted from Seller: Net seller payout = 500,000 − 14,375 = 485,625.00.
- If Added to Buyer: Total buyer payment = 500,000 + 14,375 = 514,375.00.
For full property transfer taxes and first-home exemptions, use the /en/real-estate-tax-calculator. You can also compute standalone tax invoices with the /en/vat-calculator, analyze product markups with the /en/margin-calculator, and run quick ratio checks in the /en/percentage-calculator.