Define: Commission

UK 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.

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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.


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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.



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
https://payrollheaven.com/define/commission/
Modern Language Association (MLA):
Commission. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. February 21, 2020 https://payrollheaven.com/define/commission/.
Chicago Manual of Style (CMS):
Commission. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/commission/ (accessed: February 21, 2020).
American Psychological Association (APA):
Commission. PayrollHeaven.com. Retrieved February 21, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/commission/

Definition Sources


Definitions for Commission are sourced/syndicated and enhanced from:

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

This glossary post was last updated: 4th February 2020.