What is a Commission Agreement?

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You can pay (or get paid) a lot of different ways: by the hour, on salary, or on commission. If someone's pay is based in whole or in part on commission, they should sign a Commission Agreement before their first day. This Agreement outlines the employment terms and compensation so both employer and employee know what to expect going forward.

Use the Commission Agreement document if:

You're hiring a new employee who will be paid in whole or in part on commission and wish to set down everyone's rights and obligations
You're being hired and you want to make sure everyone's rights and obligations are documented if your employer hasn't provided a written Commission Agreement

When you're about to hire that stellar new sales employee who works on commission, or you're about accept a great job that includes commissions, a Commission Agreement is your friend. A Commission Agreement is a contract between an employer and an employee for work paid on commission. The Agreement is helpful for both employer and employee as it outlines the details of the work relationship. Terms include a definition of the expected employment, and commission percentages and salary, if applicable. Employees benefit from formal terms if there are any misunderstanding with the employer. An employer in turn can protect their business with confidentiality and non-compete clauses in the Commission Agreement.

Interested in learning about necessary employment practices and forms? Check out our HR Guide for more information.

Other names for this document: Commission Contract, Sales Commission Agreement, Commission Sales Agreement

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