How to Calculate REALTOR® Fees

The basic four-step formula

1. Take the agreed sale price — the actual closing price, not the asking price. If you list at $1.0M and sell at $1.05M, you calculate on $1.05M.
2. Multiply by the total commission percentage from the listing agreement (e.g. 5%, 4.5%, 4%).
3. Add applicable sales tax — in Ontario, 13% HST on the commission amount. Outside Ontario, the GST/HST rate varies by province.
4. Split between listing and cooperating brokerages per the listing agreement. The listing brokerage retains its share and remits the buyer’s side at closing.

Worked examples across common GTA price points

• $700,000 at 4.5%: $31,500 + $4,095 HST = $35,595 total. Listing brokerage gets $15,750 + HST; cooperating brokerage gets $15,750 + HST.
• $1,200,000 at 5%: $60,000 + $7,800 HST = $67,800 total. Even split: $30,000 + HST per side.
• $2,000,000 at 4%: $80,000 + $10,400 HST = $90,400 total. At higher price points the percentage usually compresses; the absolute fee remains substantial.
• $3,500,000 at 3.5%: $122,500 + $15,925 HST = $138,425 total. Luxury price points routinely run between 3% and 4%.
• $550,000 at 5%: $27,500 + $3,575 HST = $31,075 total. Lower price points sometimes see slightly higher percentages because the dollar fee is smaller.

Tiered, capped, and flat-fee structures

Some listing agreements use tiered percentages — for example, 7% on the first $100,000 of sale price and 3% on the balance. The math is the same: calculate the fee for each tier, sum them, and add HST. On a $1M sale at 7%/3%, the fee is $7,000 + $27,000 = $34,000 + $4,420 HST = $38,420 — noticeably less than a 5% flat structure ($56,500). On a $500K sale at the same 7%/3% tier, the fee is $7,000 + $12,000 = $19,000 + $2,470 HST = $21,470 — only slightly less than a 4% structure.

Flat-dollar fees ($X,000 regardless of sale price) and capped percentages (e.g. “5% capped at $40,000”) are also legal in Ontario. Read your agreement carefully — a tiered structure on a high-priced home can sometimes be cheaper than a single percentage and sometimes substantially more expensive depending on where the breakpoints sit. See our Ontario realtor-fee overview for typical GTA structures.

Quick reference: $50K increments at common rates

Below is the all-in commission (commission + HST) at three common GTA total commission rates, in $50K increments. Use it as a sanity check against any proposal you receive:

• $500K: 4% → $22,600 · 4.5% → $25,425 · 5% → $28,250
• $750K: 4% → $33,900 · 4.5% → $38,138 · 5% → $42,375
• $1.0M: 4% → $45,200 · 4.5% → $50,850 · 5% → $56,500
• $1.5M: 4% → $67,800 · 4.5% → $76,275 · 5% → $84,750
• $2.0M: 4% → $90,400 · 4.5% → $101,700 · 5% → $113,000
• $3.0M: 4% → $135,600 · 4.5% → $152,550 · 5% → $169,500

What’s NOT in the commission calculation

Commission does not include legal fees ($1,500–$2,500), mortgage discharge ($300–$400), prepayment penalties on closed mortgages, moving costs, or pre-listing prep (staging, repairs, photography upgrades). For a complete walk-through of total seller cost beyond commission, see our closing costs when selling a house guide.

Frequently Asked Questions

Is commission charged on the listing price or the actual sale price?

On the actual sale price (the price the property closes at). If you list at $1.0M and sell at $1.05M, commission is calculated on $1.05M. If you sell below ask at $950K, commission is calculated on $950K.

Are there cases where the buyer pays commission directly?

Yes — some FSBO and pre-construction arrangements ask the buyer’s side to fund their own representation. These arrangements should be spelled out in writing in the buyer-representation agreement before any showings, and the all-in cost to the buyer should be quantified.

Does HST on commission apply outside Ontario?

GST or HST applies across Canada at provincially set rates. Outside Ontario, the rate differs (5% GST in Alberta, 5% GST + provincial sales taxes in some provinces, 12% combined in B.C., etc.). Confirm the local rate with the listing brokerage.

Can I deduct commission from capital gains?

Yes — if the sale is taxable (e.g. an investment property or a property not eligible for the principal-residence exemption), commission paid is a deductible selling cost that reduces your capital gain. See our capital gains guide for the full picture.