How do you convert a media budget from gross to net?
Multiply gross by (1 − commission). $10,000 gross at 15% commission is $8,500 net, and the agency’s fee is $1,500. Going the other way, divide net by (1 − commission).
Commission vs markup: the same rate, different money
| On $8,500 net media | Client billed | Agency fee |
|---|---|---|
| 15% commission (of gross) | $10,000.00 | $1,500.00 |
| 15% markup (on net) | $9,775.00 | $1,275.00 |
| 17.65% markup (on net) | $10,000.00 | $1,500.00 |
Where gross and net show up
- Media plans are usually agreed in gross. The media plan template works out gross from net per row.
- Pacing must be net, because platforms report net spend. The pacing calculator converts for you.
- Invoices show net, commission and gross per line. The media invoice generator builds one from your spend.
How to convert gross and net
- Pick commission or markup. Commission is a share of the client-billed amount; markup is added on top of net media.
- Say which amount you have. Choose gross if it’s what the client pays, net if it’s what the platforms receive.
- Enter the amount and rate. The net, the agency fee and the gross appear straight away, with the equivalent rate in the other method.
Frequently asked questions
How do you calculate net from gross?
Net = gross × (1 − commission ÷ 100). A $10,000 gross budget at 15% commission leaves $8,500 net for media, and the agency keeps $1,500.
How do you calculate gross from net?
Gross = net ÷ (1 − commission ÷ 100). $8,500 of net media at 15% commission bills $10,000 gross. Adding 15% on top of net ($9,775) is a markup, not a commission, and earns less.
What is the difference between agency commission and markup?
Commission is a percentage of the gross (client-billed) amount; markup is a percentage added on top of net. A 15% commission equals a 17.65% markup. Mixing them up under-bills: 15% added to net is only 13.04% of gross.
Why does gross vs net matter for pacing?
Ad platforms only see the net amount. Comparing platform spend with a gross budget makes campaigns look underspent by the commission rate, so pace against net.
What is a standard media agency commission?
Traditionally 15% of gross, which is where the 15% convention comes from, but many agencies now charge lower commissions, flat fees or retainers. Use whatever your contract says.