Sales commission agreement template
A commission agreement answers the questions every salesperson and business eventually asks: which sales count, what percentage is paid, when a commission is earned and paid, and what happens to deals still open when the arrangement ends.
This template is a general starting point, not legal advice. Laws differ between countries and states, so have it checked before signing anything important.
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Sales Commission Agreement
This Sales Commission Agreement starts on __________ between __________ (the "Company") and __________ (the "Salesperson"). The Salesperson is __________.
1. Scope
This Agreement covers sales of __________ made by the Salesperson.
2. How Commission Is Calculated
Commission is __________.
3. When It Is Earned
A commission is earned __________.
4. When It Is Paid
Earned commissions are paid __________, with a statement showing each sale and amount.
5. Refunds and Cancellations
Refunds and cancellations: __________.
6. Ending the Arrangement
On ending this Agreement: __________.
7. Changes and Records
Changes to the rate or rules apply only to sales made after they are agreed in writing. The Company will keep records of sales and commissions and let the Salesperson review the records for their own sales on request.
Company
__________
Salesperson
__________
Define “earned”
The most common commission dispute is about timing — whether a commission was earned when the deal was signed, invoiced or paid.
- Say exactly which event earns the commission.
- Say what is deducted from the price before the rate applies.
- Decide in advance what happens to open deals when someone leaves.
- Some states require commission plans to be in writing. California, for example, requires a signed written contract describing how commissions are computed and paid for employees working there (Labor Code §2751).
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