Contract For Commission Based Employment Template for Australia

A Contract For Commission Based Employment creates a legally binding employment relationship where your compensation is structured around sales performance, targets, or other measurable outcomes. This specialized employment agreement is governed by Australian employment law and must comply with the Fair Work Act 2009, ensuring you receive both commission-based earnings and minimum employment protections.

When do you need this document?

You need this contract when joining a sales role where your income depends on commission, such as real estate, insurance, or retail sales positions. It's also essential when transitioning from a salary-only role to commission-based compensation, or when your employer wants to formalize performance-based pay structures. Companies use this document to engage sales representatives, business development managers, or account executives where earnings correlate directly with results. The contract becomes crucial when establishing territory assignments, client portfolios, or specific sales targets that determine your compensation.

Key legal considerations

Your commission structure must comply with National Employment Standards, meaning you're still entitled to minimum wage, annual leave, and sick leave regardless of commission earnings. The contract should clearly define how commissions are calculated, when they're paid, and what happens to earned but unpaid commissions if employment ends. Pay careful attention to restraint of trade clauses, which may limit your ability to work for competitors or solicit clients after leaving. Territory and client ownership provisions can significantly impact your earning potential and future career options. The agreement must also address superannuation contributions on commission income, as employers must contribute to your super fund on all earnings, not just base salary.

Legal requirements in Australia

Under the Fair Work Act 2009, your contract must include minimum employment standards even in commission-based roles, including maximum working hours, rest breaks, and public holiday entitlements. The Superannuation Guarantee Act requires your employer to contribute at least 11% of your total earnings, including commissions, to your superannuation fund. Your contract must clearly distinguish you as an employee rather than an independent contractor, as commission-based work can blur this distinction with significant tax and legal implications. Work Health and Safety obligations apply regardless of commission structure, meaning your employer must provide a safe working environment. Income tax obligations require proper PAYG withholding on commission payments, and your contract should specify how tax is handled on irregular commission income. Any performance targets must be reasonable and achievable, and termination procedures must follow fair work principles even when performance doesn't meet commission thresholds.