Don’t let commission structures catch you out

by Maya Breen19 Feb 2015
An associate at PCC Lawyers has shared her tips on how brokers can ensure they are getting their commission structures right in their business.

PCC Lawyers associate, Lucienne Gleeson told Australian Broker that structuring the correct commission arrangement is vital.
“Commission structures should be clearly defined in writing and signed by both the company and its employees,” she said.  
“Disputes often occur over what the terms of a commission arrangement are and it is therefore crucial to carefully document this.”
Gleeson also said to look out for whether there are any discretionary elements to the structure, “such as if the employee's employment is terminated they will not be paid any outstanding commission”. This also needs to be specified in writing, she added.
Other important terms include how much commission can be earned and on what basis, for example on percentage of sales or a fixed payment for each sale.
Lastly, she said it’s also very important to define when the commission will be paid to the employee.