Commission Agreement Format
Commission disputes destroy good working relationships faster than almost anything else. This template spells out exactly what earns commission, how much, and when it gets paid.
Fill in your details
Your letter
When and how to use this letter
Use this agreement whenever anyone earns a percentage of sales: sales representatives, referral partners, affiliate marketers, or property dealers. Sign it before the first qualifying sale is made.
A signed PDF exchanged by email is standard for commission arrangements. Keep the signed copy with your finance records, since commission statements will reference it every pay cycle.
Be ruthlessly specific in the qualifying-sales definition. State the minimum deal size, what counts as a completed sale, and whether renewals or repeat orders earn commission. Most commission arguments come from one vague sentence in this clause.
Include what to avoid: avoid paying commission on revenue you never collect; this template ties payout to receipt of customer payment. Avoid handshake splits on team deals; require the split to be agreed in writing before the sale closes. And never leave the clawback period undefined, or refunded sales become permanent overpayments.
What happens next: the recipient starts generating sales, you issue commission statements with each payment showing the calculation, and both sides keep records. A non-obvious tip: send the statement even when commission is zero for the period. Regular statements build trust and surface misunderstandings while they are still small. Keep every statement for at least three years, since commission queries often resurface during tax audits or partnership reviews.
Frequently asked questions
When exactly is commission considered earned?
What happens to commission if a customer gets a refund?
Do repeat orders from the same customer earn commission?
Related templates
💬 Comments
Used this template, or have a question about it? Share your experience below — it helps everyone who writes a similar letter.