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Staff Commission Agreement

Staff commission agreements are common in many companies. They are designed to motivate employees to work harder and achieve better results. In this article, we will look at what a staff commission agreement is, how it works, and what are some of the things you should consider when drafting one.

What is a Staff Commission Agreement?

A staff commission agreement is a legal document that outlines the terms and conditions of a commission-based compensation plan for employees. This agreement is often used in sales-oriented organizations where employees are rewarded based on their sales performance. The agreement will outline how commissions are calculated, when they are paid, and what percentage of a sale an employee will receive as their commission.

How Does it Work?

Under a staff commission agreement, an employee is typically paid a percentage of the sale price for each unit sold. The percentage paid to the employee will vary depending on what is agreed upon in the contract. The commission is often used as an incentive for employees to make more sales. The more sales an employee makes, the higher their commission will be.

What are Some Considerations When Drafting a Staff Commission Agreement?

When drafting a staff commission agreement, there are several key factors that need to be considered. These include:

1. Commission Structure: The commission structure should be clearly defined in the agreement. This includes the percentage paid for each sale and any minimum or maximum amounts that need to be met before commissions are paid.

2. Payment Schedule: The payment schedule should be outlined in the agreement. This includes when payments will be made and how often they will be paid.

3. Sales Targets: The agreement should specify any sales targets that need to be met before commissions are paid. This can help to motivate employees and ensure that they are working towards a specific goal.

4. Termination Clause: It is important to include a termination clause in the agreement. This should outline the circumstances under which the agreement can be terminated and what happens to any commissions owed to the employee in the event of termination.

5. Legal Compliance: The agreement should comply with all relevant legal regulations. This includes minimum wage laws, overtime laws, and any other laws that may apply.


A staff commission agreement can be a useful tool for motivating employees and improving sales performance. However, it is important to ensure that the agreement is drafted properly and complies with all relevant legal regulations. If you are considering implementing a staff commission agreement in your organization, it is recommended that you seek the advice of a qualified legal professional.