Quick question: our GM makes 4% of NI. Net income changes once his commission is posted. I had an algebraic formula to calculate early in my career. I now calc by reducing NI by incremental percentages until the commission equals 4% of NI after the commission is paid. TIA.

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What’s the question? 🤔

likefunny

I don’t really know what you’re trying to accomplish here. Couple things, net income is not a net income until all expenses have been deducted, so I would just put a commission line after your operating expenses (aka NI before comm) Calc on that and then Calc NI, especially if these are internal reports. Or if you’re looking for some sort of function or formula look up “goals seek” you set the parameters and it find answer for you.

I don’t remember the mathematical term but if you do a cross with x representing commission in the upper left, lower left is the net income, upper right is 4 (the percentage), and lower right is 100.

Diagonally multiply so you’ll have 100x = 4NI.
Now solve for x by diving both sides by 100. X = Commission.

The name is a proportion.

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I would ask for a copy of his contract, most have modifiers to NI in them also I would say if this is the only info given the percentage would be based on NI before commission

It is 4% of income after commission is deducted.

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