Business, Legal & Accounting Glossary

Definition: Commission


Quick Summary of Commission

The fee paid for a service, often based on results or on a percentage of the sales or profits.
A committee (often official) dedicated to a specific aspect of business.

What is the dictionary definition of Commission?

Dictionary Definition

  1. A sending or mission (to do or accomplish something).
  2. An official charge or authority to do something, often used of military officers.
  3. The thing to be done as agent for another.

n. 1) a fee paid based on a percentage of the sale made by an employee or agent, as distinguished from regular payments of wages or salary. 2) a group appointed pursuant to law to conduct certain government business, especially regulation. In the US, these range from the local planning or zoning commission to the Securities and Exchange Commission or the Federal Trade Commission.

Full Definition of Commission

A commission is a fee paid to a third party in exchange for assistance in completing a financial transaction. A commission may either be a percentage of the value of the transaction, or a flat fee. In financial markets, a commission is commonly associated with stock transactions. Advances in technology have greatly reduced commission rates. Discount brokers achieve low commission rates through automation of trading and customer service. Brokers specializing in high-volume accounts may reduce commission rates by offering ECN rebates to traders providing liquidity. Stock and foreign exchange brokers may offer so-called zero commission trading. This may be a false economy for thrifty traders; instead of making money on a commission, such brokers make their money by either widening the spread or selling the right to execute the order to a market maker who can widen the spread.

Examples of Commission in a sentence

The sales force is paid a commission based on the gross amount of their sales, so they are greatly motivated to make as many big sales as possible.
Because that company supply services to the county, they often have to provide reports to the County Commission to justify their invoices.

Commission FAQ's

What Is Commission?

A fee charged by a broker or agent for his/her service in facilitating a transaction, such as the buying or selling of securities or real estate. In the case of securities trading, brokers can be split into two broad categories depending on the commissions they charge. Discount brokers charge relatively low commissions, but provide no services beyond executing trades. Full-service brokers charge higher commissions, but provide research and investment advisory services.

Cite Term

To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.

Page URL
Modern Language Association (MLA):
Commission. Payroll & Accounting Heaven Ltd.
January 29, 2022
Chicago Manual of Style (CMS):
Commission. Payroll & Accounting Heaven Ltd. (accessed: January 29, 2022).
American Psychological Association (APA):
Commission. Retrieved January 29, 2022
, from website:

Definition Sources

Definitions for Commission are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 21st November, 2021 | 4 Views.