Sales Commission Contract

Company: [Company Name] · Salesperson: [Name] · Effective Date: [Date]

1. Commission Structure

Salesperson earns commission of [%] of [gross sales/net revenue/gross margin] on sales they generate, per the rate schedule in Exhibit A [if tiered by volume or product line].

2. When Commission Is Earned

Commission is earned when: [ ] the sale is closed (contract signed) [ ] payment is received from the customer [ ] the product/service is delivered — specify the triggering event clearly.

3. Payment Timing

Earned commissions are paid [Frequency, e.g. with the next regular payroll cycle after the commission is earned].

4. Clawback/Chargebacks

If a sale is cancelled, refunded, or the customer fails to pay within [Period], the associated commission [will be deducted from future commission payments / must be repaid], per this section.

5. House Accounts and Splits

[State whether any accounts are excluded from commission (house accounts) and how commission is split on team sales.]

6. Draw (if applicable)

[Reference a separate draw agreement, if Salesperson receives a draw against future commissions.]

7. Upon Termination

[State how commission is handled for sales in progress or not yet paid at the time employment ends — e.g. "commissions earned but unpaid as of the termination date will be paid on the next regular payroll date."]

Company: ______________________ Date: ____________ Salesperson: ______________________ Date: ____________

*Defining exactly when a commission is "earned" (Section 2) is the single most litigated term in sales compensation disputes — a vague plan that doesn't specify whether it's the signed contract, the payment, or the delivery that triggers commission leaves room for a costly disagreement when a big deal falls through mid-process.*