Commission is when you make money based on the percentage of _____________.

Commission is a performance-based form of compensation that is directly tied to specific actions, usually related to sales activities. The correct completion of the statement is that commission is earned as a percentage of total sales. This means that individuals, such as sales representatives or brokers, receive a payment based on the total revenue generated from their sales efforts. The more they sell, the higher their commission will be, as it’s calculated as a percentage of the overall sales figures.

This structure incentivizes sales personnel to maximize their sales efforts, aligning their earnings with the success of the company. For example, if a salesperson sells $100,000 worth of products and earns a 10% commission, they would receive $10,000 in commission.

While the other options like budgets, investments, and items sold may relate to sales in some contexts, they do not accurately capture the essence of commission as a percentage payment methodology. Budgets pertain more to spending plans rather than earnings. Investments refer to returns based on growth or gains, and while items sold can relate to commission, they typically refer to quantity rather than the financial aspect of total sales. Thus, total sales is the most accurate descriptor for how commissions are typically calculated.