Skip to main content

Commission and Taxes

Commission​

Definition​

Commission is a fixed percentage of the selling price paid to an agent for helping in a transaction.

It is common in real estate, banking, insurance, and retail.

Key Terms​

TermMeaning
Selling Price (SP)Total price at which goods/services are sold
Commission Rate (%)Percentage of SP given to the agent as commission
Commission AmountActual money earned by the agent / given to the agent
Net IncomeAmount received by seller after commission

Formulas​

  • Commission Amount=Rate Percentage×SP100 \text{Commission Amount} = \dfrac{\text{Rate Percentage} \times \text{SP}}{100}

  • Net Income=SP−Commission Amount \text{Net Income} = \text{SP} - \text{Commission Amount}

  • Commission Percent=Commission AmountSP×100% \text{Commission Percent} = \dfrac{\text{Commission Amount}}{\text{SP}} \times 100\%

Tiered Commission​

Tiered (or stepped) commission applies different rates to portions of the selling price that fall within defined brackets.

Net Income = SP - Commission Amounts

Taxation​

Tax is a mandatory financial charge imposed by the government.

It funds public services like education, health, and infrastructure.

Types of Tax​

TypeDescription
Direct TaxPaid directly by individuals (e.g., income tax, property tax)
Indirect TaxCollected via goods/services (e.g., VAT, customs duty)

Income Tax Rates (Nepal)

Income Range (Single)Single Tax RateIncome Range (Couple)Couple Tax Rate
Up to 3,50,0001%Up to 4,00,0001%
3,50,000 – 4,50,00015%4,00,000 – 5,00,00015%
4,50,000 – 25,00,00025%5,00,000 – 25,00,00025%
Above 25,00,00035%Above 25,00,00035%

Tax Formula (KaTeX)​

Tax Amount=Rate100×Taxable Income\text{Tax Amount} = \dfrac{\text{Rate}}{100} \times \text{Taxable Income}