How to work out a commission
The calculator above works as you type. Multiplying by the rate is the easy step; the ones after it are where the money is.
Pick what you are solving for
Four modes: a commission on an amount (the default), a tiered bracket commission, the Saudi statutory brokerage commission, and who invoices whom for an agent or a marketplace.
Say whether the rate includes VAT
A commission rate is silent about tax, and the two readings are different amounts of money. 2.5% excluding VAT is really 2.875% of the deal; 2.5% including it leaves the broker with less. The tool computes both and labels each.
Say what the transaction itself is
This is the control no other calculator has. If the deal is exempt — a property sale, for instance — it carries no VAT, while the commission on it carries the full rate. Both are shown as separate rows, because they sit on different bases.
Read what the principal is left with
The last row is the figure a seller or an owner actually cares about: the deal value less the commission including its tax. It is derived by subtracting figures that are already rounded, so the column always adds up.
A commission is a service, not a slice of a deal
Every commission calculator online multiplies an amount by a rate and stops. The multiplication is right, but it is not the question. In the GCC a commission is an invoice in its own right: it has a supplier, a recipient, a tax base of its own, and in one market a payer named in legislation.
That has a consequence which inverts the arithmetic: the tax lands on the commission and not on the deal — and the deal itself may be entirely exempt while the commission on it is fully taxable.
We examined sixteen commission calculators, in Arabic and English. All of them do the multiplication. Not one has a field that distinguishes the two bases.
The commission is taxed even where the deal is exempt
Article 30 of Saudi Arabia’s VAT Implementing Regulations exempts "the supply of real estate, whether residential, commercial, agricultural, or developed or undeveloped bare land, by way of transferring its ownership or disposing of it as an owner". ZATCA’s own real-estate sector guideline dates it: from 4 October 2020, with real-estate transaction tax applying instead.
But Article 29(1) says something else about the fee. Financial services are exempt "excluding cases where the consideration payable in respect of the service is an explicitly determined fee, commission or commercial discount". Article 42(4) of the UAE Executive Regulation says the same thing in near-identical words.
In practice: a house sells for SAR 2,000,000 with a 2.5% commission. VAT on the sale price is zero — the supply is exempt. VAT on the commission is SAR 7,500, which is 15% of 50,000. A calculator with one tax field would have printed SAR 300,000 by pointing the rate at the number in front of it. That is a factor of forty, not a rounding.
Naming the money changes the tax
The rule has a second face in the same article. Article 29(5)(d) lists among the exempt financial services "commissions charged on an implicit margin or an implicit spread between bid and ask prices for brokerage services, or under a mudaraba or an agency contract".
So the same money is exempt when it is buried in a spread and taxable the moment it is stated as a commission. The economics are identical and the treatment is not; the difference is the naming alone. It is not a rule anybody would guess, which is why it is worth reading from its text.
Real estate brokerage: a statutory rate, and a base you would not guess
Saudi Arabia’s Real Estate Brokerage Law does not leave the rate to agreement alone. Article 14(1) provides that the commission "shall be set at 2.5% of the value of the transaction if it is a sale, and of the value of the first year’s rent only if it is a lease, unless the parties to the brokerage contract agree otherwise in writing".
That second clause is what every calculator throws away. A five-year lease at SAR 120,000 a year has a contract value of 600,000 but a commission base of 120,000: SAR 3,000, not 15,000. The multiplier is the lease term, so on a twenty-year commercial lease the error is twentyfold.
Clause 2 names the payer: the party who contracted with the broker bears the commission. Clause 3 caps the total rather than the rate — where the broker contracts with more than one party to the same deal, the sum of what it takes may not exceed the stated rate, and Article 19 of the Executive Regulation splits it equally by default. That is 1.25% from each side, not 2.5% from both.
Does the 2.5% include VAT, or is VAT added to it?
No instrument answers. Article 14 sets a rate and does not mention tax; the VAT Regulations tax the commission and do not mention the 2.5%; neither document references the other. The Arabic web is split, with some publishers presenting "2.5% + VAT" and others treating the 2.5% as inclusive.
The difference is not a detail. On a SAR 2,000,000 sale the first reading gives a commission of 50,000 and tax of 7,500, so the seller pays 57,500. The second gives a net commission of 43,478.26 and tax of 6,521.74, so the seller pays 50,000. SAR 7,500 apart — the whole of the tax.
Because the question is open, the tool does not pick. It shows both readings and names each. That is not evasion; it is what the sources support, and the page says so rather than promoting one reading to the status of a rule.
The commission on a deal that never happened
Deals collapse, and the law answers that too. Article 15 makes the commission due where the transaction is not completed and the seller or lessor becomes entitled to the earnest money, and Article 21 of the Executive Regulation sets the share: the broker is entitled to 25% of the earnest money.
The deposit itself is bounded. Article 13(1) requires that it not exceed 5% of the transaction value, and where it does, "the amount shall be treated as a down payment" — it loses its character rather than being returned.
So on a SAR 2,000,000 sale with a 5% deposit the broker is owed SAR 25,000, plus SAR 3,750 of VAT, for 28,750. Note that it is still a taxable service although the sale never happened: the supply is the intermediation, not the transfer.
Who invoices whom: eleven words that invert the chain
Article 9 of UAE Federal Decree-Law No. (8) of 2017 states the rule in two clauses. A supply of goods and services through an agent acting in the name of and on behalf of a principal "is considered to be a supply by the principal and for his benefit"; through an agent acting in his own name it is "a direct supply by the agent and for his benefit".
Article 47 of the Saudi Regulations pushes electronic marketplaces into the second case by default: the marketplace is deemed "to have purchased the services from the non-resident suppliers for its own account and to have re-supplied them in its own name and for its own account to the customer", unless the supplier is expressly named in the contract, the tax invoice and the receipt, and the marketplace neither sets the terms nor determines, charges or collects the consideration.
Take a SAR 1,000 sale through a platform charging 10%. In the first case the seller invoices the buyer 1,150 and the platform invoices the seller 115. In the second the platform invoices the buyer 1,150 and the seller invoices the platform 1,035. Completely different invoices, completely different totals.
The surprise is that the platform pays the same tax either way: SAR 15. In the first case that is output tax on the commission alone; in the second it is 150 of output tax less 135 of input tax. What changes is the invoices, the totals, the cash flow and who is registered for what — not how much tax exists.
Tiered brackets, and where the rounding goes
Brackets exist in the English calculators and not at all in the Arabic ones. Each bracket applies only to the slice of the amount falling inside it: SAR 300,000 with 5% to 100,000, then 7% to 250,000, then 10% gives 5,000 + 10,500 + 5,000 = 20,500 — a blended rate of 6.8333%, which is none of the three on screen.
There is a technical choice worth stating here: round each line and sum, or sum exactly and round once at the end? We round each line, because a bracket is a displayed row rather than an intermediate step, and a total that does not equal the rows above it is the defect users actually report. It is also what this site’s discount calculator does with separately stated allowances.
Why Bahrain, Oman and Kuwait show three decimals
The Bahraini dinar, Omani rial and Kuwaiti dinar have a thousand minor units rather than a hundred: a dinar is 1,000 fils, a rial is 1,000 baisa. Their amounts are written to three decimal places.
A Bahraini example at 10%: a 3% commission on a BHD 47,500.750 deal is 1,425.023, its tax is 142.502, and the total is 1,567.525. Round to two decimals and the figures are wrong in the third place.
None of the calculators we examined renders three decimals. This one uses each currency’s own precision.
The tool computes; it does not decide
Whether a commission was earned is a question about your contract rather than about arithmetic: Article 15 requires the transaction to complete during the brokerage contract or within two months of its expiry, with the brokerage proved.
Whether an agent acts in its own name is settled by the contract and, for a marketplace, by the five-part test in Article 47. This page computes both outcomes and chooses neither.
Nor does it compute real-estate transaction tax: that is a separate tax with its own law, exemptions and return. The page states that the property supply is exempt from VAT and points at RETT without pricing it.
And no statutory brokerage rate is claimed outside Saudi Arabia. Dubai’s widely quoted 2% is a market convention documented in agency forms, not a legislative provision we were able to retrieve, so it is neither prefilled nor cited. Oman’s and Bahrain’s instruments could not be read in this round, so no commission rule is attributed to either.
Frequently asked questions
How do I calculate a commission?
Commission = amount × rate ÷ 100. A 2.5% commission on a SAR 2,000,000 deal is SAR 50,000. The step usually skipped is the next one: a commission is a taxable service, so VAT is added to it — SAR 7,500 at Saudi Arabia’s 15% — unless the rate was agreed as VAT-inclusive.
Is VAT charged on a commission?
Yes. A commission is consideration for a service, and Article 29(1) of the Saudi VAT Implementing Regulations excepts from the financial services exemption any case where the consideration "is an explicitly determined fee, commission or commercial discount". Article 42(4) of the UAE Executive Regulation provides the same. The one exception is a commission carried in an implicit margin or bid-ask spread, which stays exempt under Article 29(5)(d).
What is the real estate agent commission in Saudi Arabia?
2.5% of the transaction value for a sale, and of the first year’s rent only for a lease, under Article 14 of the Real Estate Brokerage Law — unless the parties to the brokerage contract agree otherwise in writing. The party who contracted with the broker bears it.
How is the commission calculated on a long lease?
On the first year’s rent alone, not on the whole contract. A five-year lease at SAR 120,000 a year has a base of 120,000 rather than 600,000, so the commission is SAR 3,000 and not 15,000. Article 14(1) says so explicitly.
Is VAT added to the 2.5%, or included in it?
No official text answers. Article 14 sets the rate without mentioning tax, and the VAT Regulations tax the commission without mentioning the rate. The difference is large: on a SAR 2,000,000 sale the first reading totals 57,500 and the second 50,000. The tool computes both and leaves the written agreement to settle it.
If the broker contracts with both the buyer and the seller, do they pay 2.5% each?
No. Article 14(3) provides that the total the broker receives may not exceed the stated rate, and Article 19 of the Executive Regulation splits it equally between the parties unless they agree otherwise. That is 1.25% from each.
Is a commission payable if the deal falls through?
It can be. Where the seller or lessor becomes entitled to the earnest money because the transaction failed, the broker is entitled to 25% of that deposit under Article 21 of the Executive Regulation — and it is a taxable commission like any other. The deposit itself may not exceed 5% of the transaction value, under Article 13.
Does a platform invoice the customer for the whole amount or only its commission?
It depends on the agent’s capacity. Under Article 9 of the UAE Decree-Law, an agent acting in the principal’s name invoices only its commission, while one acting in its own name is treated as the supplier and invoices the whole consideration. Article 47 of the Saudi Regulations deems an electronic marketplace into the second case unless specific conditions are met. The agent’s net tax is the same either way; the invoices are not.
Does this work for Kuwait and Qatar?
Yes, as a plain commission calculator. Neither had implemented VAT as of our last review, so the tool runs at a zero rate there and shows the commission and the net proceeds with no tax rows. If you need a specific rate anyway, choose the custom rate option.