What is a commissionable rate?
A commissionable rate is a selling price on which an agent or reseller earns an agreed commission. If the whole £100 price is commissionable at 20%, the commission is £20 and £80 remains for the supplier before other charges. The agreement defines which parts of the price qualify.
A net rate is the amount agreed for the supplier before the reseller’s selling margin or other agreed charges. Commission and markup use different calculation bases. Adding 20% to an £80 net rate does not produce the same result as deducting 20% commission from a £100 selling price.
Commissionable rate, net rate and markup
- Gross or retail rate: the customer-facing selling price for the product, using the inclusions and tax treatment specified in the agreement.
- Commissionable amount: the part of the price used to calculate commission. It may differ from the full retail total.
- Commission: the agreed payment to a selling partner, calculated from the stated base.
- Net rate: the supplier amount used in a net-rate agreement; confirm what is included and what is deducted separately.
- Markup: an addition calculated on a net or cost amount to produce a selling price.
Tourism Australia’s distribution guidance describes gross rate as net rate plus agent commission. Treat this as a pricing relationship, not a promise about taxes, settlement dates or every supplier contract. Those details still need to be agreed.
Commissionable-rate formulas
Where the entire retail price is commissionable: commission = retail price × commission percentage. Supplier amount before other deductions = retail price × (1 − commission percentage). Use 0.20 for 20%.
To retain a target amount before other deductions: retail price = target supplier amount ÷ (1 − commission percentage). This calculation assumes the whole retail price is commissionable and that no additional charge changes the result.
Example 1: calculate commission from a retail price
A tour sells for £120 with an illustrative 25% commission on the full amount. Commission is £120 × 0.25 = £30. The supplier amount is £90 before payment processing, booking software, delivery costs and any other deductions. The 25% is an example, not a quoted marketplace rate.
Example 2: work backwards from a target net amount
To retain £90 before other deductions at 25% commission, divide £90 by 0.75. The required retail price is £120. Simply adding 25% to £90 produces £112.50; deducting 25% commission from that leaves only £84.375 before rounding.
Example 3: show why markup differs
A reseller applying a 25% markup to an £80 net rate sells at £100. The £20 difference is 25% of the £80 net rate but 20% of the £100 retail price. Always state whether the percentage is measured against net or retail.
What if only part of the booking is commissionable?
Separate commissionable and non-commissionable items before calculating. For example, suppose a £120 total contains a £100 commissionable tour and a £20 excluded item. At 20% commission on the tour only, commission is £20, not £24. The remaining £100 is before any other deductions or settlement adjustments.
Do not assume that taxes, extras, mandatory charges or discounts receive the same treatment. Record each component and its calculation base in the agreement. Ask your accountant how to record revenue, tax and commission for your role and jurisdiction.
Commission is not the same as profit
The amount received after commission still needs to cover delivery and other costs. A £100 booking with £20 commission and £35 in delivery costs leaves £45 before any processing, software, advertising, overheads and taxes not already included. This is a simplified contribution example, not net profit.
Compare a direct booking using the same method. Direct sales can carry advertising, payment, software and staff costs. A reseller may bring bookings you would not otherwise win, but extra volume is only helpful if the contribution and operational capacity work.
Payment timing is a separate decision
Neither a net rate nor a commissionable rate guarantees steady cash flow. Agree who collects customer money, when the supplier is paid and what happens after a cancellation, refund, no-show or dispute. A commercially attractive rate can still create cash pressure if payment arrives after your delivery costs are due.
Put these items on your reseller rate sheet
- Product, option, departure dates, ticket categories and currency.
- Retail or net rate, plus a clear definition of every commissionable component.
- Commission percentage or fixed amount, rounding method and tax treatment.
- Extras, discounts, promotions and the party authorised to approve them.
- Payment collection, settlement dates and statement details.
- Cancellation, refund, no-show and dispute treatment.
- Rate validity, capacity rules, cutoffs and any agreed price restrictions.
Confirm the terms in writing with each partner. A generic industry percentage does not override the agreement for your product. Avoid assuming that volume automatically earns a higher commission or that a net-rate model gives either party unrestricted control of the final price.
Reconcile at booking level
Use a sample booking to compare the customer price, commission base, commission amount, other deductions and supplier payment. Check a cancellation and a discounted booking too. Investigate differences before applying the setup across your catalogue.
TicketingHub supports booking and reseller workflows. Ask the team to demonstrate the rate setup, permissions and reporting needed for your agreement. Do not assume every partner’s commercial model can be implemented without checking the configuration.
TicketingHub’s service fee is 3.5% of each booking on pay as you go, on every channel, with no monthly or setup fee. A 12-month subscription lowers it to 2.75%. Payment processing and marketplace commissions are separate. A booking-software fee is not a replacement for a reseller’s commission.
