The Commission Draw Agreement serves as a critical document in establishing a structured compensation system that provides sales professionals with income stability while maintaining performance incentives. This agreement type is particularly valuable when onboarding new sales staff or in industries with longer sales cycles, where immediate commission earnings might be delayed. Under Indonesian law, particularly considering the Law No. 13 of 2003 on Manpower and Government Regulation No. 78 of 2015 on Wages, this agreement must carefully balance the draw and commission structure while ensuring compliance with minimum wage requirements and employee protection provisions. The document typically includes detailed commission calculations, draw recovery mechanisms, payment schedules, and performance expectations, all while adhering to local labor regulations.
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1. Parties: Identification of the employer and employee entering into the agreement
2. Background: Context of the agreement and employment relationship
3. Definitions: Key terms including 'Commission', 'Draw', 'Sales', 'Gross Revenue' and other relevant definitions
4. Commission Structure: Detailed explanation of commission rates, tiers, and calculation methods
5. Draw Arrangement: Terms of the draw payment, including amount and frequency
6. Draw Recovery: Process for recovering draw payments from earned commissions
7. Payment Terms: Timeline and method of commission payments and draw reconciliation
8. Reporting and Accounting: Requirements for sales reporting and commission calculations
9. Employment Status: Confirmation of employment relationship and integration with existing employment terms
10. Term and Termination: Duration of the agreement and conditions for termination
11. Post-Termination Obligations: Handling of outstanding draws and commissions after termination
12. Governing Law: Specification of Indonesian law as governing law
1. Non-Competition: Restrictions on competitive activities, if applicable under Indonesian law
2. Territory Assignment: If the commission structure is territory-based
3. Performance Targets: If specific sales targets or quotas are tied to the commission structure
4. Bonus Structure: Additional incentive programs beyond basic commission
5. Training Requirements: If specific training is required to maintain commission eligibility
6. Dispute Resolution: Specific procedures for resolving commission-related disputes
7. Currency and Exchange Rates: For international sales or multi-currency transactions
1. Commission Rate Schedule: Detailed breakdown of commission rates and tiers
2. Draw Calculation Example: Sample calculations showing draw recovery and commission payments
3. Sales Territory Map: If territory-based, defining the assigned sales area
4. Product List: List of products/services eligible for commission
5. Commission Report Template: Standard format for monthly commission reports
6. Existing Employment Agreement: Reference to or incorporation of existing employment terms
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