Commission Pay Agreement Template for Indonesia

This Commission Pay Agreement template is designed for use in Indonesia when establishing performance-based compensation arrangements between employers and employees. It is particularly relevant for sales-oriented roles where compensation is partially or wholly based on achieved results. The document ensures compliance with Indonesian labor laws, including Law No. 13 of 2003 on Manpower, while providing flexibility to structure commission payments based on business needs. It includes essential provisions for commission calculations, payment terms, performance metrics, and mandatory benefits, making it suitable for both local Indonesian companies and multinational corporations operating in Indonesia. The agreement can be customized based on industry-specific requirements while maintaining alignment with local employment regulations and market practices.

1. Parties: Identification of the employer and the employee, including their complete legal names, addresses, and any relevant registration numbers

2. Background: Context of the agreement, nature of the business, and the purpose of entering into a commission-based arrangement

3. Definitions: Detailed definitions of key terms used in the agreement, including 'Commission', 'Sales', 'Gross Revenue', 'Target', etc.

4. Appointment and Duration: Terms of employment, position, and duration (whether fixed-term or permanent)

5. Commission Structure: Detailed explanation of how commission is calculated, including rates, tiers, and qualifying criteria

6. Payment Terms: Timeline and method of commission payments, including any minimum guaranteed base salary

7. Performance Targets: Specific sales or performance targets that must be met to earn commissions

8. Reporting and Documentation: Requirements for sales reporting, documentation, and verification processes

9. Employment Benefits: Standard benefits as required by Indonesian law, including social security (BPJS) and religious holiday allowance (THR)

10. Termination: Conditions and procedures for termination, including treatment of pending commissions

11. Confidentiality: Protection of company's confidential information and trade secrets

12. Governing Law: Specification that the agreement is governed by Indonesian law

13. Dispute Resolution: Process for resolving disputes, typically through Indonesian labor courts