Commission Only Contract Template for the United Arab Emirates

A Commission Only Contract is a specialized employment agreement used in the United Arab Emirates where your compensation is entirely based on commission earnings rather than a fixed salary. This type of contract is governed by UAE Federal Law No. 33 of 2021 and must comply with specific regulatory requirements to ensure both employer and employee protection.

When do you need this document?

You need a Commission Only Contract when hiring sales representatives, real estate agents, business development professionals, or independent contractors whose earnings are tied directly to their performance. This arrangement is common in industries such as insurance, telecommunications, automotive sales, and property development. The contract is essential when establishing territory-based sales roles, product-specific commission structures, or when transitioning from traditional salary arrangements to performance-based compensation. It's also required when engaging freelance sales agents who work exclusively on commission without employee benefits.

Key legal considerations

Under UAE law, commission-only arrangements must clearly define the commission structure, calculation methods, and payment schedules to avoid disputes. The contract must specify minimum performance requirements, territory boundaries, and the exact products or services covered under the commission scheme. Protection clauses should address scenarios such as client refunds, cancelled orders, and commission clawbacks. The agreement must also outline reporting obligations, including sales documentation and client relationship management. Termination clauses should specify notice periods, final commission payments, and any post-employment restrictions such as non-compete or client solicitation limitations.

Legal requirements in United Arab Emirates

Commission Only Contracts in the UAE must comply with Federal Law No. 33 of 2021 and Ministerial Resolution No. 43 of 2022, which provide detailed guidelines on employment contracts and payment terms. All commission payments must be processed through the Wage Protection System (WPS) as mandated by Ministerial Decree No. 739 of 2016, ensuring transparent and timely payment to employees. The contract must be registered with the Ministry of Human Resources and Emiratisation and include provisions for end-of-service benefits where applicable. If the arrangement involves commercial agency relationships, additional compliance with UAE Federal Law No. 18 of 1993 may be required. The agreement must specify the governing law jurisdiction and include dispute resolution mechanisms that align with UAE commercial and labor law requirements.