A commission plan is a type of employment agreement where an employee is paid a commission for each sale that they make. The commission is generally a percentage of the sale price, and the agreement should outline how commissions will be calculated and paid out. Commission plans can be used in different types of businesses, but are most common in sales-based organizations.
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A commission plan is a legal document that can be either incorporated into an employment contract as a schedule, or introduced into an existing employment relationship at any time. The employer has the discretion to make changes to the scheme or withdraw it at any time. The commission plan may be used in conjunction with Standard clause, Commission clauses and Standard document, Letter of invitation to participate in a commission plan.