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Commission Draw Agreement

Commission Draw Agreement Template for Indonesia

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Key Requirements PROMPT example:

Commission Draw Agreement

"I need a Commission Draw Agreement for our Jakarta-based pharmaceutical sales team, with a monthly draw of IDR 8,000,000 and graduated commission rates starting at 3% for regular products and 5% for new product launches planned for March 2025."

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Document background
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.
Suggested Sections

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

Optional Sections

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

Suggested Schedules

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

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant legal definitions
Agreement
Applicable Law
Base Salary
Commission
Commission Period
Draw
Draw Period
Draw Recovery
Earned Commission
Effective Date
Eligible Sales
Employment Agreement
Gross Revenue
Net Sales
Payment Date
Products
Qualified Sale
Quarter
Revenue Recognition
Sales Credit
Sales Territory
Service Period
Target
Term
Termination Date
Unearned Commission
Working Hours
Year
Commission Rate
Customer
Confidential Information
Intellectual Property
Performance Metrics
Reporting Period
Sales Documentation
Social Security Benefits
Commission Statement
Draw Account
Draw Balance
Excess Commission
Monthly Draw Amount
Payment Currency
Reconciliation Period
Sales Quota
Shortfall
Threshold Amount
Clauses
Interpretation
Term
Employment Status
Commission Structure
Draw Arrangement
Payment Terms
Draw Recovery
Sales Territory
Performance Requirements
Reporting Requirements
Record Keeping
Confidentiality
Non-Competition
Non-Solicitation
Intellectual Property
Termination
Post-Termination Obligations
Assignment
Modification
Entire Agreement
Severability
Notices
Force Majeure
Dispute Resolution
Governing Law
Social Security Compliance
Working Hours
Leave Entitlements
Expense Reimbursement
Training Requirements
Representation and Warranties
Indemnification
Compliance with Laws
Data Protection
Amendment
Relevant Industries

Real Estate

Insurance

Financial Services

Technology Sales

Manufacturing

Pharmaceutical

Automotive

Telecommunications

Industrial Equipment

Professional Services

Retail (High-value items)

Construction Materials

Medical Equipment

Business Services

Relevant Teams

Sales

Business Development

Account Management

Human Resources

Finance

Legal

Sales Operations

Compensation & Benefits

Revenue Operations

Contract Administration

Relevant Roles

Sales Representative

Account Executive

Business Development Manager

Sales Manager

Territory Manager

Regional Sales Director

Commission Administrator

Sales Operations Manager

Account Manager

Client Relations Manager

Senior Sales Executive

Product Specialist

Solutions Consultant

Sales Engineer

Channel Sales Manager

Industries
Law No. 13 of 2003 on Manpower: The main employment law framework in Indonesia that governs employment relationships, including provisions on wages, working conditions, and employment agreements
Government Regulation No. 78 of 2015 on Wages: Regulates wage structures and scales, including provisions relevant to commission-based compensation systems
Indonesian Civil Code (KUHPerdata): Provides the basic framework for contractual agreements and obligations between parties, particularly Articles 1313-1351 governing contracts
Law No. 24 of 2011 on Social Security Administrative Bodies (BPJS): Mandates social security coverage for employees, including those on commission-based arrangements
Law No. 36 of 2008 on Income Tax: Governs the taxation of various forms of income, including commissions and employment-related compensation
Minister of Manpower Regulation No. 1 of 2017: Provides guidelines on wage structures and scales, including provisions for variable compensation like commissions
Law No. 11 of 2020 on Job Creation (Omnibus Law): Recent reform affecting various aspects of employment law, including wage and employment agreement provisions
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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