Employee Draw Agreement

Company: [Company Name] · Employee: [Name] · Position: [Title] · Date: [Date]

1. Draw Amount

Company will advance Employee a draw of [Amount] per [pay period], against commissions Employee earns during that period.

2. Recoverable vs. Non-Recoverable Draw

[ ] Recoverable draw — any draw amount exceeding commissions earned in a period carries forward as a balance owed, deducted from future commission earnings. [ ] Non-recoverable draw — Employee keeps the draw amount as a minimum guaranteed payment, regardless of commissions earned, and any shortfall is not owed back.

3. Reconciliation

Draws and earned commissions are reconciled [Frequency, e.g. monthly], with any overpayment (recoverable draw only) carried forward as a balance against future commissions.

4. Upon Termination

[State how any outstanding recoverable draw balance is handled if Employee's employment ends — e.g. "any outstanding balance is forgiven" or "deducted from final commissions due, but not from base wages, consistent with applicable wage law."]

5. Minimum Wage Compliance

In any pay period, Employee will receive at least the applicable minimum wage for hours worked, regardless of the draw/commission reconciliation.

Company: ______________________ Date: ____________ Employee: ______________________ Date: ____________

*This document is provided for informational and educational purposes only and does not constitute legal advice. Several states restrict or prohibit deducting a negative recoverable-draw balance from a departing employee's final paycheck — treating it instead as an uncollectible business debt — so confirm your state's specific wage deduction rules before assuming Section 4 is enforceable as written.*