Commission Based Employment Contract Template for Australia

This document is an Australian employment contract specifically designed for commission-based employment arrangements, compliant with Australian federal and state employment laws. It establishes the terms and conditions of employment where a significant portion of compensation is tied to performance-based commission structures. The contract addresses crucial elements including base salary (if any), commission calculations, performance targets, payment schedules, and employee entitlements under Australian law, while protecting both employer and employee interests through clear terms regarding confidentiality, intellectual property, and post-employment obligations.

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What is a Commission Based Employment Contract?

The Commission Based Employment Contract is essential for businesses operating in Australia that employ sales professionals or other personnel whose compensation is primarily based on commission. This document is designed to comply with Australian employment law, including the Fair Work Act 2009 and relevant Modern Awards, while establishing clear parameters for commission-based compensation. It is particularly relevant for industries where performance-based pay is standard practice, such as real estate, financial services, and retail sales. The contract includes comprehensive provisions for commission structures, performance metrics, payment schedules, and statutory entitlements, ensuring both employer and employee interests are protected while maintaining compliance with Australian workplace regulations.

What sections should be included in a Commission Based Employment Contract?

1. Parties: Identifies the employer and employee, including their full legal names, addresses, and ACN/ABN where applicable

2. Background: Brief context of the employment arrangement and purpose of the agreement

3. Definitions: Defines key terms used throughout the agreement, particularly commission-related terminology

4. Position and Duties: Details the employee's role, responsibilities, reporting lines, and performance expectations

5. Commission Structure: Core commission calculation methodology, targets, and payment terms

6. Base Salary and Benefits: Any guaranteed base salary, superannuation, and standard benefits

7. Term and Hours of Work: Employment duration (if fixed-term) and working hours arrangements

8. Leave Entitlements: Annual, personal, long service and other leave entitlements as per National Employment Standards

9. Confidentiality: Protection of confidential information and trade secrets

10. Intellectual Property: Ownership and protection of IP created during employment

11. Non-Compete and Non-Solicitation: Post-employment restrictions on competition and client/employee solicitation

12. Termination: Grounds for termination, notice periods, and consequences

13. General Provisions: Standard legal clauses including governing law, entire agreement, and variation

What sections are optional to include in a Commission Based Employment Contract?

1. Probationary Period: Include when the employer wants to implement an initial trial period

2. Company Property: Include when employee is provided with significant company equipment or resources

3. Remote Work Arrangements: Include for roles with work-from-home or hybrid arrangements

4. Bonus Structure: Include if additional bonus schemes exist beyond commission

5. International Travel: Include for roles requiring overseas travel

6. Team Management: Include for roles with supervisory responsibilities

7. Performance Review Process: Include when formal review processes affect commission structures

8. Clawback Provisions: Include when commission payments may need to be returned under certain circumstances

What schedules should be included in a Commission Based Employment Contract?

1. Commission Calculations: Detailed formulas and examples of commission calculations

2. Sales Territories: Definition of geographical or client territories if applicable

3. Product/Service Lines: List of products/services and associated commission rates

4. KPIs and Targets: Detailed performance metrics and targets

5. Reporting Requirements: Templates and timing for sales and commission reports

6. Employee Benefits: Detailed description of additional benefits and eligibility criteria

7. Company Policies: Key workplace policies affecting the employment relationship

8. Commission Payment Schedule: Timing and process for commission payments

Is a commission based employment contract legally binding in Australia?

Yes, a commission based employment contract is legally binding in Australia when properly executed. It must comply with the Fair Work Act 2009, National Employment Standards, and any applicable Modern Awards to be enforceable. The contract creates legal obligations for both employer and employee regarding performance-based compensation arrangements.

Do I need a lawyer to create a commission based employment contract in Australia?

While not legally required, consulting an employment lawyer is highly recommended for commission based contracts. These agreements involve complex compliance requirements under the Fair Work Act 2009 and Modern Awards. A lawyer can ensure the contract meets minimum wage obligations and protects both parties' interests.

Can I work on commission only without a base salary in Australia?

Generally no, Australian employment law requires commission-based employees to receive at least the minimum wage under applicable Modern Awards. The Fair Work Act 2009 and National Employment Standards mandate minimum entitlements that cannot be waived. Pure commission arrangements may breach these requirements unless structured as genuine independent contractor relationships.

Authors

Alex Denne

Advisor @ GenieAI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Australia

Publisher

GenieAI

Cost

Free to use

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