Commission Based Employment Contract Template for Australia

A Commission Based Employment Contract is a specialised employment agreement that governs compensation arrangements where your pay is primarily or partially based on performance metrics, sales targets, or other measurable outcomes. Under Australian law, this contract must comply with the Fair Work Act 2009 and National Employment Standards while clearly defining commission structures, payment schedules, and your statutory entitlements as an employee.

When do you need this document?

You need this contract when entering employment where commission forms a significant part of your compensation package. This commonly occurs in sales positions across industries like real estate, insurance, financial services, automotive sales, and retail. The document is essential for protecting both parties' interests when your income fluctuates based on performance rather than receiving a fixed salary. It's particularly important for senior sales roles, business development positions, or when transitioning from salary to commission-based pay structures.

Key legal considerations

Your commission structure must comply with minimum wage requirements under the National Employment Standards, meaning your total compensation cannot fall below the relevant Modern Award minimums. The contract should clearly define commission calculation methods, payment timeframes, treatment of chargebacks or refunds, and what happens to earned commissions upon termination. Superannuation obligations apply to commission payments, requiring your employer to contribute the statutory percentage to your nominated fund. The agreement must also address annual leave entitlements, which can be complex when your income varies, and should include provisions for dispute resolution regarding commission calculations or payment delays.

Legal requirements in Australia

Under the Fair Work Act 2009, your commission-based employment must still meet all National Employment Standards, including maximum working hours, leave entitlements, and termination notice periods. The contract must specify how your commission earnings affect superannuation calculations under the Superannuation Guarantee (Administration) Act 1992. Your employer must maintain accurate records of commission calculations and payments as required by Fair Work regulations. The agreement should address taxation obligations under the Income Tax Assessment Act 1997, including PAYG withholding from commission payments. Additionally, any restraint of trade clauses must be reasonable and necessary to protect legitimate business interests, as Australian courts scrutinise post-employment restrictions carefully, particularly in commission-based roles where client relationships are valuable.