Draw Against Commission Agreement Template for Ireland

A Draw Against Commission Agreement provides a structured approach to sales compensation in Ireland, combining the security of regular payments with the motivation of commission-based earnings. This contract allows you to offer sales representatives steady income through advance payments (draws) while maintaining performance incentives through commission structures.

When do you need this document?

You need this agreement when hiring sales representatives who require income stability while working on commission-based compensation. This is particularly important in industries with long sales cycles, such as real estate, insurance, or B2B software sales, where months may pass between sales activities and commission payments. The document is also essential when expanding your sales team and wanting to attract experienced representatives who might otherwise avoid purely commission-based roles. Additionally, you'll need this agreement when your business experiences seasonal fluctuations that could leave sales staff without income during slower periods.

Key legal considerations

The agreement must clearly define the relationship between draw payments and commission earnings, including reconciliation procedures and repayment obligations. You need to specify whether unearned draws are recoverable from the employee and under what circumstances. The contract should address what happens to outstanding draw balances upon termination, whether voluntary or involuntary. Commission calculation methods must be transparent, including how sales territories, team sales, and partial commissions are handled. The agreement should also cover expense reimbursement policies and whether draws are considered advances or guaranteed minimum payments for legal and tax purposes.

Legal requirements in Ireland

Under the Terms of Employment (Information) Acts 1994-2014, you must provide written terms within two months of employment commencement, including detailed commission structure information. The Payment of Wages Act 1991 governs how and when commission payments must be made, prohibiting unauthorized deductions from wages. If your sales representatives qualify as commercial agents under the Commercial Agents Regulations 1994 & 1997, additional protections apply, including compensation rights upon termination. The Taxes Consolidation Act 1997 affects how draw payments and commission clawbacks are treated for tax purposes. Your agreement must comply with the Organization of Working Time Act 1997 regarding working hours and rest periods, even for commission-based roles. Consumer Protection Act 2007 requirements may apply if your sales activities involve consumer transactions.