New York Real Estate Commission and Split Calculations

Example: a $600,000 sale with a stated 5% commission produces $30,000. If a cooperating brokerage receives 40%, its share is $12,000. If its salesperson receives 70% of that share, the salesperson receives $8,400 through the associated broker under the facts.

What are the core commission formulas?

Use these relationships:

Total commission = Sale price × Stated commission rate

Brokerage share = Total commission × Brokerage split

Salesperson share = Associated brokerage's share × Salesperson split

For a reverse problem:

Commission rate = Total commission ÷ Sale price

Sale price = Total commission ÷ Commission rate

The formula is only as accurate as its base. A salesperson split usually applies to the commission received by that salesperson's brokerage in the stated problem, not directly to the sale price.

Official source map

The New York State Department of State 77-hour curriculum lists commissions under Subject 10, Real Estate Mathematics. It also addresses how compensation is determined and antitrust issues in Subject 2, Law of Agency.

The Department of State salesperson page says the written examination is multiple choice, is based on the 77-hour curriculum and allows 1 1/2 hours. The page does not publish an official number of commission questions or a subject distribution.

New York Real Property Law supplies the legal boundary:

• Real Property Law section 442-a says a real estate salesperson may not receive or demand compensation for covered real estate services from anyone other than the duly licensed broker with whom the salesperson is associated.
• Real Property Law section 442 governs splitting compensation received by a broker and identifies the licensed or otherwise specified persons to whom a broker may pay it, subject to the section's details and exceptions.

Federal antitrust authorities emphasize competition in brokerage services. A 2025 U.S. Department of Justice statement explains that competition among real estate brokerages is important and that agreements not to compete can face antitrust scrutiny.

For exam math, use the rate and payment structure given in the facts. Avoid assuming a fixed commission rate, a universal payer or a standard split.

Are New York real estate commission rates fixed?

No. Brokerage compensation is negotiable. A commission problem must state a rate, flat fee or enough information to calculate the compensation.

Do not memorize a familiar percentage and insert it when the question is silent. Doing so creates both a math error and a misleading view of brokerage pricing.

The same rule applies to splits:

• a split between brokerages must be stated
• a split between a brokerage and its salesperson must be stated
• a team split, referral fee or expense deduction must be stated before it belongs in the math

If an exam-preparation question omits a necessary rate, it is incomplete unless another fact allows the rate to be derived.

Who pays the salesperson in New York?

For licensed real estate services covered by Real Property Law section 442-a, a salesperson receives compensation from the duly licensed broker with whom the salesperson is associated. A buyer, seller, landlord, tenant or another salesperson should not be treated as paying the salesperson directly in an exam scenario.

This legal rule is separate from the arithmetic question of who has agreed to pay brokerage compensation in the transaction. The facts may describe compensation paid by a seller, buyer, landlord, tenant or another source permitted by the governing agreements and law. Follow the stated agreement and current law without assuming one national pattern.

What is the safest calculation order?

Draw a money path:

Sale price
   × stated commission rate
= Total commission
   × brokerage share
= Brokerage commission
   × salesperson split
= Salesperson compensation through associated broker

Write the base beside every percentage:

The word “split” does not identify the base by itself. The sentence does.

How do you calculate total commission?

Example 1: Stated percentage

A property sells for $725,000. The problem states a 4.8% total commission.

$725,000 × 0.048 = $34,800

The total commission is $34,800.

Estimate first. Five percent of $725,000 is $36,250, so a 4.8% result should be slightly lower.

Example 2: Decimal conversion below 1%

A stated fee is 0.75% of a $2,400,000 transaction value.

0.75% = 0.0075

$2,400,000 × 0.0075 = $18,000

The fee is $18,000.

Do not enter 0.75 as the decimal rate. That would represent 75%.

How do you split commission between brokerages?

Example 3: Equal split

A $36,000 total commission is divided equally between two brokerages.

$36,000 × 0.50 = $18,000

Each brokerage receives $18,000 under the facts.

Example 4: Unequal split

A $42,500 total commission is split 55% to the listing brokerage and 45% to the cooperating brokerage.

Listing brokerage: $42,500 × 0.55 = $23,375

Cooperating brokerage: $42,500 × 0.45 = $19,125

Check:

$23,375 + $19,125 = $42,500

If the shares are supposed to divide the entire commission, their rates should add to the full stated split and their dollars should add to the total commission.

How do you calculate the salesperson's split?

Example 5: Split from brokerage share

A salesperson's brokerage receives $21,600. The salesperson's stated split is 65% of that brokerage share.

$21,600 × 0.65 = $14,040

The salesperson's gross share under the problem is $14,040.

The brokerage retains:

$21,600 × 0.35 = $7,560

Check:

$14,040 + $7,560 = $21,600

“Gross share” here means before any separate deductions expressly stated in the problem. It is not a tax classification or a promise about a real compensation agreement.

How do you solve a complete three-step problem?

Example 6: Sale, brokerage split and salesperson split

A property sells for $840,000 with a stated 4.5% commission. The cooperating brokerage receives 40% of the total commission. Its salesperson receives 75% of the brokerage's share.

Step 1: Total commission

$840,000 × 0.045 = $37,800

Step 2: Cooperating brokerage share

$37,800 × 0.40 = $15,120

Step 3: Salesperson share

$15,120 × 0.75 = $11,340

The salesperson's stated share is $11,340, paid through the associated broker.

One-line check

The same result can be checked by multiplying the rates in sequence:

$840,000 × 0.045 × 0.40 × 0.75 = $11,340

Use the one-line version as a check, not as a substitute for labeling each base while learning.

What if the question gives the salesperson amount first?

Work backward one relationship at a time.

Example 7: Find brokerage share

A salesperson receives $12,600 under a 70% split. What commission did the salesperson's brokerage receive before that split?

$12,600 ÷ 0.70 = $18,000

The brokerage received $18,000.

Example 8: Find total commission

The $18,000 brokerage share in Example 7 represented 40% of the total commission.

$18,000 ÷ 0.40 = $45,000

The total commission was $45,000.

Example 9: Find sale price

The $45,000 total commission represented 5% of the sale price.

$45,000 ÷ 0.05 = $900,000

The sale price was $900,000.

Backward problems use division because the known dollar amount is a percentage part of a larger base.

How do you calculate a flat fee plus a percentage?

Follow the stated structure. Do not turn a flat amount into a rate unless asked.

Example 10

A hypothetical compensation agreement in a math problem states $4,000 plus 1.5% of a $500,000 sale price.

Percentage portion = $500,000 × 0.015 = $7,500

Total = $4,000 + $7,500 = $11,500

The total stated compensation is $11,500.

This is an original arithmetic example, not a suggested fee structure.

How do rental commission problems work?

Identify whether the stated percentage applies to monthly rent, annual rent or the total rent over a defined lease term.

Example 11: Percentage of annual rent

Monthly rent is $3,200. A hypothetical problem states compensation equal to 6% of the first year's rent.

Annual rent = $3,200 × 12 = $38,400

Compensation = $38,400 × 0.06 = $2,304

The compensation is $2,304 under the stated facts.

If the rate applied to one month's rent instead, the base would be $3,200. Resist the urge to assume the period.

How do referral-fee calculations work?

Calculate only after the problem establishes that the fee is lawful and gives the rate and base. New York Real Property Law sections 442 and 442-l contain legal restrictions that a simple percentage cannot resolve.

Example 12: Arithmetic only

A problem expressly states a lawful referral fee equal to 20% of a brokerage's $15,000 commission.

$15,000 × 0.20 = $3,000

The arithmetic result is $3,000. The fact that multiplication works does not establish that a referral payment is legally permitted in a real transaction.

What if expenses are deducted before a split?

The order must come from the facts.

Example 13: Deduction before split

A brokerage share is $20,000. The problem says a $1,000 stated transaction expense is deducted before a 70% salesperson split.

Split base = $20,000 - $1,000 = $19,000

Salesperson share = $19,000 × 0.70 = $13,300

Different wording, different answer

If the same $1,000 were deducted from the salesperson's share after applying 70%:

$20,000 × 0.70 = $14,000

$14,000 - $1,000 = $13,000

The two answers differ because the agreement changes the order. Avoid assuming desk fees, team fees, marketing costs, taxes or other deductions unless the problem states them.

How do you calculate each side of a 60/40 split?

Treat 60/40 as two complementary rates only when the wording says the full amount is divided that way.

For a $25,000 brokerage commission:

60% share = $25,000 × 0.60 = $15,000

40% share = $25,000 × 0.40 = $10,000

Check:

$15,000 + $10,000 = $25,000

The first number does not automatically belong to the salesperson. The agreement or question must identify which party receives each share.

What are the most common commission-math mistakes?

Applying the salesperson split to the sale price

A salesperson's internal split usually applies to the associated brokerage's commission in the stated problem, not the property's price.

Skipping the brokerage split

If two brokerages divide the total commission, find the relevant brokerage share before applying its salesperson split.

Reading 70/30 without identifying the parties

The numbers alone do not identify who gets 70%. Read the agreement or question.

Treating commission as fixed

Use only the negotiated or hypothetical rate in the facts. Do not present one percentage as standard.

Assuming who pays

The transaction facts and governing agreements control the source of brokerage compensation. The salesperson compensation rule still routes covered payment through the associated broker.

Subtracting every expense before the split

Apply deductions in the order expressly stated. Different compensation agreements can define the split base differently.

Rounding too early

Carry cents through intermediate steps and round the final currency answer as the question directs.

Forgetting the reverse check

Add split shares back to the original total or multiply the recovered base by the rate.

How do you make commission math faster without becoming careless?

Use a four-line setup:

1. Sale price × rate = total commission
2. Total commission × brokerage rate = brokerage share
3. Brokerage share × salesperson rate = salesperson share
4. Reverse or sum check

Cross out a line when the problem does not include that step. Do not invent a brokerage split merely because practice questions often contain one.

Estimate before calculating. If the total commission is roughly $40,000, a salesperson's amount after two fractional splits cannot reasonably be $200,000.

Original practice set

Question 1

A property sells for $675,000 with a stated 4.4% commission. What is the total commission?

Question 2

A total commission of $52,000 is split 60% to Brokerage A and 40% to Brokerage B. How much does Brokerage B receive?

Question 3

Brokerage B receives $20,800. Its salesperson receives 72% of that amount. What is the salesperson's share?

Question 4

A salesperson receives $16,200 under a 75% split. What amount did the associated brokerage receive before the split?

Question 5

A $28,800 commission represents 4% of the sale price. What was the sale price?

Question 6

A $37,950 commission was paid on a $690,000 sale. What rate does it represent?

Question 7

A $960,000 sale has a stated 5.25% commission. The cooperating brokerage receives 45%, and its salesperson receives 68% of that share. What does the salesperson receive?

Question 8

Monthly rent is $4,500. A hypothetical problem states compensation equal to 5% of the first year's rent. What is the compensation?

Question 9

A brokerage receives $30,000. The problem says a $1,500 expense is deducted before a 65% salesperson split. What is the salesperson's share?

Question 10

A hypothetical fee is $3,500 plus 1.25% of a $720,000 sale price. What is the total?

Practice solutions

Solution 1

$675,000 × 0.044 = $29,700

Solution 2

$52,000 × 0.40 = $20,800

Solution 3

$20,800 × 0.72 = $14,976

Solution 4

$16,200 ÷ 0.75 = $21,600

Solution 5

$28,800 ÷ 0.04 = $720,000

Solution 6

$37,950 ÷ $690,000 = 0.055 = 5.5%

Solution 7

$960,000 × 0.0525 = $50,400 total commission

$50,400 × 0.45 = $22,680 cooperating brokerage share

$22,680 × 0.68 = $15,422.40 salesperson share

Solution 8

$4,500 × 12 = $54,000 first-year rent

$54,000 × 0.05 = $2,700

Solution 9

$30,000 - $1,500 = $28,500 split base

$28,500 × 0.65 = $18,525

Solution 10

$720,000 × 0.0125 = $9,000

$9,000 + $3,500 = $12,500

Frequently asked questions

How do you calculate real estate commission?

Multiply the sale price by the commission rate stated in the problem. Convert the percentage to a decimal first.

How do you calculate a salesperson commission split?

Multiply the commission received by the salesperson's associated brokerage by the salesperson split stated in the problem. Apply any prior brokerage split first.

Are commission rates fixed in New York?

No. Brokerage compensation is negotiable. Use the rate in the agreement or exam-preparation problem, not a presumed standard rate.

Can a New York salesperson collect commission directly from a client?

For the covered real estate services described in Real Property Law section 442-a, a salesperson may receive or demand compensation only from the duly licensed broker with whom the salesperson is associated.

What does a 70/30 commission split mean?

It means one party receives 70% and the other receives 30% of a stated base. The wording must identify the parties and whether the base is total commission, a brokerage share or another amount.

Do you apply the salesperson split to the sale price?

Not when the problem says the split applies to the brokerage's commission. Find the total commission and relevant brokerage share first.

How do you find sale price from commission?

Divide the known total commission by its decimal rate. A $30,000 commission at 5% corresponds to a $600,000 sale price.

How do you find the commission rate?

Divide total commission by sale price, then convert the decimal to a percentage.

Does the seller pay the commission in every transaction?

Avoid assuming a universal payer. Follow the compensation agreement, transaction facts and current law. For exam math, the stated payer usually does not change the percentage calculation.

Does New York publish the number of commission questions on the exam?

The public salesperson page identifies the exam format, time and curriculum basis but does not publish a commission-question count or subject distribution.

Can I use a calculator?

The Department allows a calculator only if it is silent, battery- or solar-powered, does not contain an alphabetic keyboard and does not print. Recheck the current rule before exam day.

What to do next

Review Part, Rate and Whole if you are unsure which dollar amount is the base. Use the New York real estate math formula map to connect commission math with interest, points, valuation, taxes and investment calculations.

Then complete the Real Estate Mathematics study guide and practice changing the unknown: total commission, brokerage share, salesperson share, rate and sale price.

Sources and verification notes

This article was checked on August 27, 2026. It separates arithmetic examples from legal compensation rules. Rates, splits, payers, deductions and fee structures in examples are hypothetical unless an official source is expressly identified. Current agreements and law control a real transaction.

1. New York State Department of State, Real Estate Salesperson 77-Hour Curriculum. Commission percentage math, compensation concepts and antitrust topics in the current syllabus.
2. New York State Department of State, Become a Real Estate Salesperson. Multiple-choice format, curriculum basis, 1 1/2-hour time and calculator rules.
3. New York Real Property Law section 442-a. Restriction on a salesperson receiving or demanding compensation from anyone other than the duly licensed broker with whom the salesperson is associated for covered real estate services.
4. New York Real Property Law section 442. Rules governing a broker's splitting of fees, commissions and other compensation, including specified recipients and exceptions.
5. New York Real Property Law section 442-l. Restrictions on after-the-fact referral fees.
6. U.S. Department of Justice, statement supporting competition among real estate brokerages, December 19, 2025. Current federal competition context without prescribing a commission rate.

This article provides general exam-preparation information, not legal, tax, accounting, compensation or brokerage advice. The examples are original and are not copied from the state examination.