Commission and Dividend: Grade 9 Math

In Chaitra 2077, Nepal Telecom announced that it would pay its owners Rs 40 for every share they held, out of the profit of the year 2076/77. Lhamu’s grandmother owns 150 Nepal Telecom shares. How much money reaches her bank account? And when a newspaper calls this a “40% dividend”, it is 40% of what?

Money is shared out by percentages like this all the time: an agent who finds a buyer for a plot of land keeps a part of the price, a company that made a profit gives its staff a part of it, and it gives its owners another part. This unit is about those three shares: commission, bonus and dividend. By the end of 3.3 you will work out the grandmother’s dividend yourself.

Sources: the Nepal Telecom dividend as Gorkhapatra Online reported it on 14 Chaitra 2077; the tax on dividends, Income Tax Act, 2058, section 88(2)(a).

A curved office building of six floors, cream bands between rows of blue glass windows, lit up at dusk behind a brick wall and a small garden — **Figure 3.1** Nepal Telecom’s head office in Kathmandu. The company is owned by its shareholders: the Government of Nepal holds most of its shares, and ordinary people own the rest, bought and sold on the Nepal Stock Exchange. In each year that it makes a profit, part of the profit is paid to them as a dividend. Photo: Saddam Hussain Ansari, CC BY 4.0

For the exam

The question: Grade 9’s final exam follows CDC’s specification grid for Compulsory Mathematics, Grades 9–10, where Arithmetic is 13 marks in three questions (in the grid’s Grade 9 model questions: tax, dividend, and household arithmetic). In those model questions, the dividend question is 3 marks: a. a fact, such as where a cash dividend comes from (1 mark), b. what percentage of the profit is paid out (1), c. one shareholder’s dividend in a new situation (1). It can be on commission or bonus too.
What it needs:

Commission = rate % of the selling price; with bands, each band’s rate on the part of the sale inside it.
Rate of commission = commission ÷ selling price × 100%.
Bonus to each employee = rate % of the profit ÷ the number of employees.
Dividend per share = rate % of the profit ÷ the number of shares; a shareholder gets that × the shares they own.

How the exam asks it has a full question marked part by part; Exam practice has every exercise question to mark yourself.

3.1 Commission

A person who acts between the seller and the buyer of goods or services is an agent. The money an agent is paid for arranging a sale, worked out as a percentage of the selling price, is the commission. The agent can be paid by the seller, by the buyer, or by both, as they agree.

Commission is always expressed as a percentage, and it is worked out on the selling price:
$\text{Commission} = \frac{\text{rate of commission}}{100} \times \text{selling price}$

Commission is paid in land and house sales, in buying and selling shares, by banks and insurance companies to their agents, and to salespeople in shops and showrooms, on top of their salary, for what they sell.

An agent is paid 2% commission on a house sold for Rs 80,00,000. How much commission is that?

Pick an answer to see why.

Commission in bands

Some companies pay a higher rate the more an agent sells, to reward big sales. The rates are then set in bands, as income tax is (Unit 2): each rate is paid only on the part of the sale inside its band.

Salary plus commission

A salesperson in a shop is often paid a fixed salary and, on top of it, a commission on what they sell. So the month’s income is
$\text{income} = \text{salary} + \text{commission}$
and working backwards, the rate is the commission as a percentage of the sales:
$\text{Rate of commission} = \frac{\text{commission}}{\text{selling price}} \times 100\%$

Did you know?

The commission when you buy shares

When a person buys or sells shares on the Nepal Stock Exchange (NEPSE), the broker who places the order is paid a commission. The rates are set by the size of the trade, in the rules for stockbrokers that the Securities Board of Nepal (SEBON) proposes and the Ministry of Finance approves. Since 1 Jestha 2081 (14 May 2024) they have been: 0.36% on a trade up to Rs 50,000, 0.33% above Rs 50,000 up to Rs 5 lakh, 0.31% above Rs 5 lakh up to Rs 20 lakh, 0.27% above Rs 20 lakh up to Rs 1 crore and 0.24% above Rs 1 crore. The notice gives one rate for each size of trade, which suggests that rate is charged on the whole trade rather than band by band as in Example 2, but it doesn’t say so, and we could not confirm it. So shares bought for Rs 40,000 cost $\frac{0.36}{100} \times 40000 =$ Rs 144 in commission (and small fees besides). The rates may change again.

A salesperson earns Rs 20,000 a month plus 2% commission on her sales. In one month she earned Rs 26,000. What were her sales?

Pick an answer to see why.

Exercise 3.1

Question 1

Find the commission.

	Item sold	Selling price	Rate of commission
a.	Land	Rs 1 crore 50 lakh	5%
b.	House	Rs 2 crore	3%
c.	Photocopy machine	Rs 4 lakh	7.5%
d.	Shares	Rs 5 crore 25 lakh	2%

Land: Rs 1 crore 50 lakh at 5%

Answer

House: Rs 2 crore at 3%

Answer

Photocopy machine: Rs 4 lakh at 7.5%

Answer

Shares: Rs 5 crore 25 lakh at 2%

Answer

Question 2

An agent sells a house for Rs 1,40,00,000 and is paid 5% commission by the owner.

How much commission does the agent receive?

Answer

How much does the house owner receive?

Answer

Question 3

A motorcycle showroom has 10 employees, each paid a salary of Rs 20,000 a month. Together they are paid a commission of 0.25% of the month’s total sales, shared equally among them. In Asoj the showroom’s sales were Rs 1,35,00,000.

How much does the showroom pay its employees as commission in Asoj?

Answer

By what percentage is an employee’s income in Asoj more than the monthly salary?

Answer

Question 4

A company making plastic goods pays its sellers commission at 1% on sales up to Rs 6,00,000, 1.5% on sales above Rs 6,00,000 up to Rs 10,00,000, and 2% on sales above Rs 10,00,000. Find the commission on each of these sales.

Rs 4,45,600

Answer

Rs 7,25,000

Answer

Rs 15,75,000

Answer

Question 5

A woman working in a cosmetics shop earns a salary of Rs 17,000 a month, plus a commission of a certain percentage of her sales. In Mangsir she sold goods worth Rs 10,00,000 and earned Rs 30,000 in all, with the commission. How much was her commission, and at what rate?

Answer

Project work

3.2 Bonus

Activity

1: a bonus in the news

This is from a report in Naya Patrika Daily of 24 Poush 2077, “Oil Corporation to distribute Rs 6 crore as bonus to its employees”, retold:

Nepal Oil Corporation is to pay its employees a bonus, under the law that profit-making enterprises pay a bonus in a year of profit. As a government-owned corporation, it needs the government’s approval first. From about Rs 29 crore set aside as bonus for the fiscal years 2075/76 and 2076/77, it will pay about Rs 6 crore to its employees: two months and 15 days’ salary to assistant-level staff, and two months’ salary to officers and above. The corporation’s trade union said it hoped the Ministry of Finance would approve it, since a bonus makes staff work better. Of what is left after the employees are paid, the corporation must put 80% in a government fund and 20% in its own welfare fund.

Read it and discuss:

a.Why would a company give its employees a bonus?
b.On what is the bonus based?
c.Does a company give a bonus in a year it makes no profit?

What you should find

A bonus is money that an organization pays its employees once a year, on top of their regular salary, as a part of the profit it made that year: a lump sum, given as a reward. It is worked out as a percentage of the profit. In Nepal, the staff of Nepal Electricity Authority, Nepal Telecom, Nepal Oil Corporation, Nepal Water Supply Corporation, banks and many private companies get a bonus in the years their organization makes a profit, under the law.

$\text{Bonus fund} = \frac{\text{rate of bonus}}{100} \times \text{profit}, \qquad \text{bonus to each} = \frac{\text{bonus fund}}{\text{number of employees}}$

(when it is shared equally).

Did you know?

What Nepal’s Bonus Act says

Under the Bonus Act, 2030, an enterprise that makes a profit sets aside 10% of its net profit for bonus (for a government-owned one, the government sets the percentage). The bonus is paid in cash, within eight months after the fiscal year ends. One employee can get at most eight months’ salary as bonus if their salary is up to twice the minimum wage, and at most six months’ salary if it is more. What is left over goes into welfare funds: 70% to the enterprise’s own and 30% to a national one, or for a government-owned enterprise, 20% to its own and 80% to the national fund, which is the 80 : 20 in the news above. The percentages of profit in this unit’s examples and exercises (55%, 60%…) are made up for practice; under the Act, an enterprise sets aside 10%.

3.3 Dividend

When a company makes a profit, it can keep it to grow, or share part of it with its owners. The part of the profit that a company pays to its shareholders is the dividend. A company decides what percentage of its net profit to pay, and that amount is divided equally among all its shares: the more shares you own, the more you get.

$\text{Dividend per share} = \frac{\text{total dividend}}{\text{number of shares}}, \qquad \text{your dividend} = \text{dividend per share} \times \text{your shares}$

A dividend comes in two kinds:

a.Cash dividend: money, paid into the shareholder’s bank account.
b.Share dividend: new shares instead of money, given free to the shareholders in proportion to what they own. In Nepal these are called bonus shares: a 10% bonus share gives 10 new shares for every 100 you hold.

Bonus and dividend are both shares of a profit (in Nepali both are लाभांश): a bonus goes to the people who work there, a dividend to the people who own the company.

Play with Example 3’s company. Change how much of the profit is paid out, and see what a share dividend does.

Example 3’s company: Rs 40,00,000 profit and 6,00,000 shares of Rs 100. You own 60 of them. The 10 × 10 grid is one share’s face value, Rs 100, a rupee a square; the shaded part is the dividend that one share gets.

Profit paid as dividend: 20%

Bonus shares first

Per share: Rs 1.33
Your shares: 60
Your dividend: Rs 80

No dividend this year: the company keeps all its profit.

Your 60 shares get Rs 80; after the 5% tax kept back, Rs 76 reaches your bank account.

After a 0% bonus share there are more shares, so each gets less, but you hold 60 of them: you get Rs 80, just as without the bonus shares, since you own the same part of the company.

A company with 10,00,000 shares pays a total cash dividend of Rs 15,00,000. Rabina owns 400 shares. How much dividend does she get, before tax?

Pick an answer to see why.

Back to Lhamu’s grandmother

Nepal Telecom paid Rs 40 a share, and she has 150 shares.

Dividend = 150 × 40 = 6000; tax kept back $= \frac{5}{100} \times 6000 = 300$ .

Rs 5,700 reaches her bank account. The “40%” is 40% of each share’s face value of Rs 100, not 40% of the company’s profit or of the price she paid for the shares.

A story from maths

The first share, and its dividends

The Dutch East India Company (the VOC), set up on 20 March 1602 to trade in spices with Asia, was owned in shares that any citizen of the Dutch Republic could buy, and those shares were bought and sold in open-air markets, one of which became the Amsterdam Stock Exchange. For almost 200 years it paid dividends that averaged about 18% of the capital a year; in 1669, 40% of the original investment. Dividends measured against the money first put in: the same way Nepal’s companies measure them against the face value today.

In 2010 a history student, Ruben Schalk, found the oldest share certificate known, in the archive of the town of Hoorn: a VOC share of 9 September 1606, sold to Pieter Hermanszoon Boode. Its second page records the dividends paid on it.

Two pages of an old document on yellowed paper: on the left a printed text in Dutch with the owner's name and the sum filled in by hand and signatures below; on the right a handwritten list of dates, one per line, each with an amount in a column at the right — **Figure 3.6** The oldest share certificate known, issued by the VOC’s office in Enkhuizen on 9 September 1606 (left). Its second page (right) lists, a line each, the dividends paid on the share and when, from the 1610s to 1650. Photo: VOC, Public domain

Exercise 3.2

Question 1

Find the bonus.

	Profit	Rate of bonus
a.	Rs 60 lakh	25%
b.	Rs 2 crore 50 lakh	67.5%
c.	Rs 80 lakh	48%
d.	Rs 9 crore	55%

Rs 60 lakh at 25%

Answer

Rs 2 crore 50 lakh at 67.5%

Answer

Rs 80 lakh at 48%

Answer

Rs 9 crore at 55%

Answer

Question 2

A textile factory made a profit of Rs 5 lakh 60 thousand in 2076 BS. It decided to share 60% of the profit equally among its 105 employees as a bonus. How much does each employee get?

Answer

Question 3

An insurance company decided to share two thirds of its profit equally among its 150 staff as a bonus. If each gets Rs 40,000, what was the company’s profit that year?

Answer

Question 4

Find the total dividend and the dividend per share.

	Number of shares	Rate of dividend	Net profit
a.	4,50,000	40%	Rs 50,00,000
b.	1,15,62,486	55.5%	Rs 12,00,00,000
c.	3,28,50,000	23.5%	Rs 5,20,60,000
d.	21,63,25,030	60%	Rs 2,75,67,36,894

4,50,000 shares, 40% of Rs 50,00,000

Answer

1,15,62,486 shares, 55.5% of Rs 12,00,00,000

Answer

3,28,50,000 shares, 23.5% of Rs 5,20,60,000

Answer

21,63,25,030 shares, 60% of Rs 2,75,67,36,894

Answer

Question 5

Suryalaxmi Cooperative has 13,63,497 shares of Rs 100 each, and Mamata owns 350 of them. The cooperative made a profit of Rs 1 crore 20 lakh in a year and decided to pay 45% of the profit as a cash dividend. How much cash dividend does Mamata receive?

Answer

Question 6

An insurance company has 22,39,440 shares of Rs 100 each. It made a profit of Rs 1,52,05,675 in a year, and its board of directors decided to pay 65% of the profit as a cash dividend. How much does a shareholder with 280 shares receive?

Answer

Project work

Quiz yourself on this unit →

Practice every question in the book, and keep track of the ones you miss →

How the exam asks it

Grade 9’s final exam is set to CDC’s specification grid for Compulsory Mathematics, Grades 9–10 (2078). There, Arithmetic is 13 marks in three questions; the commission and dividend question is usually 3 marks in three parts:

Part	Level	Marks	What it asks
a.	knowledge	1	a fact: what a dividend, bonus or commission is, or where it comes from
b.	application	1	a percentage: the rate paid out, or an amount
c.	higher ability	1	a shareholder’s or employee’s amount when something changes

Here is one in that shape, with how it is marked.

Where these facts come from

Nepal Telecom’s cash dividend of Rs 40 a share from the profit of 2076/77 (the opening, Activity 2, Back to Lhamu’s grandmother): Gorkhapatra Online, “Telecom passes its dividend”, 14 Chaitra 2077, as quoted in CDC’s Mathematics, Grade 9.
The Government of Nepal’s 91.49% of Nepal Telecom’s shares (the photo’s caption): The Himalayan Times, “Govt to reduce stake in Nepal Telecom to 66 percent”, 29 May 2026.
Nepal Oil Corporation’s bonus (Activity 1 of 3.2): Naya Patrika Daily, 24 Poush 2077, as quoted in CDC’s Mathematics, Grade 9.
The 5% tax kept back on dividends (the opening, the fact in 3.3): Income Tax Act, 2058, section 88(2)(a), and that it is final, section 54(1)(a); the 15% kept back on commission (the fact in 3.1): section 88(1); consolidated text on nepallaws.com, read November 2026. Bonus shares taxed at 5% of face value: news reports (ShareSansar; ICT Frame on SEBON’s directive), not the Act’s text. The 2083/84 budget’s change to the tax on the profit from selling shares, with none reported on dividends: ShareSansar, 29 May 2026; Niti Partners, “Income Tax Changes as per Budget 2083/84”.
Broker commission rates on NEPSE from 1 Jestha 2081 (14 May 2024) (the fact in 3.1): the Ministry of Finance’s notice amending Schedule 14 of the Securities Businessperson (Securities Broker and Securities Dealer) Regulations, 2064, as reproduced by NEPSE Trading, “Amendment of schedule to Securities Dealers Regulations 2064”, 28 May 2024, read November 2026; the same rates in ShareSansar, “SEBON to enact revised commission rates for stockbrokers”, 14 May 2024. The notice gives each rate for a trade of that size and doesn’t say whether it applies to the whole trade or band by band; we found no broker’s worked example that settles it. Neither SEBON’s site nor the Nepal Gazette copy was read.
The Bonus Act, 2030 (the fact in 3.2): section 5 (10% of net profit; the government sets it for government-owned enterprises), section 7 (at most eight or six months’ salary), section 9 (cash, within eight months), section 13 (the left-over amount, 70 : 30, or 20 : 80 for government-owned enterprises); consolidated text on nepallaws.com, read November 2026.
The VOC (the story): Wikipedia, “Dutch East India Company”, read November 2026; the 1606 share and its finder: its file description on Wikimedia Commons.
The exam’s commission and dividend question (For the exam, How the exam asks it): CDC, Specification Grid 2078, Compulsory Mathematics, Grades 9–10, and the model questions printed with it (question 3: K1, A1, H1).

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