Commission Pay Agreement Template for Philippines

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Key Requirements PROMPT example:

Commission Pay Agreement

"I need a Commission Pay Agreement for a pharmaceutical sales representative in Manila, with a tiered commission structure starting from 3% for basic sales targets and increasing to 8% for exceeding quarterly targets, to be effective from March 1, 2025."

Document background
The Commission Pay Agreement is essential for businesses operating in the Philippines that compensate employees through commission-based structures. This document is typically used when hiring sales professionals or transitioning existing employees to commission-based roles. It must comply with Philippine Labor Code requirements, including provisions for minimum wage protection and employee benefits. The agreement details commission rates, calculation methods, payment schedules, and performance expectations while incorporating necessary safeguards for both employer and employee. It's particularly crucial in industries where variable compensation is common, such as real estate, insurance, and retail sales. The document should be reviewed by legal counsel to ensure compliance with current Philippine employment laws and regulations.
Suggested Sections

1. Parties: Identifies the employer and the employee/sales agent, including their complete legal names and addresses

2. Background: Establishes the context of the agreement, including the nature of the business and the role of the employee/sales agent

3. Definitions: Defines key terms used throughout the agreement, including 'Commission', 'Sales', 'Gross Revenue', 'Net Revenue', etc.

4. Appointment and Scope: Defines the employee's role, responsibilities, and authorized activities

5. Commission Structure: Details the basic commission rates, calculation methods, and qualifying criteria for commissions

6. Payment Terms: Specifies when and how commissions will be paid, including payment frequency and method

7. Performance Targets: Establishes any minimum performance requirements or sales quotas

8. Reporting and Documentation: Outlines the process for tracking sales and reporting requirements

9. Term and Termination: Specifies the duration of the agreement and conditions for termination

10. Post-Termination Provisions: Addresses commission payments for deals in progress at termination

11. Confidentiality: Protects proprietary information and trade secrets

12. Governing Law: Specifies that Philippine law governs the agreement and relevant jurisdictional matters

Optional Sections

1. Team Commission Structure: Include when the employee works as part of a sales team or manages other sales personnel

2. Multiple Product Lines: Include when different commission rates apply to different products or services

3. Draw Against Commission: Include if providing a guaranteed minimum draw against future commissions

4. Territory Restrictions: Include when the sales activity is limited to specific geographic areas or markets

5. Non-Compete Clause: Include when restricting the employee's ability to work for competitors

6. Training and Support: Include when specifying company-provided training and resources

7. Expense Reimbursement: Include when the company will reimburse certain sales-related expenses

8. Benefits Package: Include when offering additional benefits beyond commission

Suggested Schedules

1. Schedule A - Commission Rates: Detailed breakdown of commission percentages for different products/services or sales thresholds

2. Schedule B - Sales Targets: Specific quarterly or annual sales targets and any corresponding bonus structures

3. Schedule C - Territory Map: If applicable, detailed description or map of assigned sales territory

4. Schedule D - Calculation Examples: Examples showing how commissions are calculated in various scenarios

5. Appendix 1 - Sales Report Template: Standard format for required sales reporting

6. Appendix 2 - Expense Claim Form: If applicable, template for submitting reimbursable expenses

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

Relevant legal definitions
Clauses
Relevant Industries

Retail

Real Estate

Insurance

Financial Services

Technology Sales

Telecommunications

Automotive

Pharmaceutical Sales

Direct Sales

Manufacturing

Professional Services

Travel and Tourism

Media and Advertising

Consumer Goods

Relevant Teams

Sales

Business Development

Account Management

Channel Management

Revenue Operations

Commercial Operations

Human Resources

Legal

Finance

Compensation & Benefits

Relevant Roles

Sales Representative

Business Development Manager

Account Executive

Real Estate Agent

Insurance Agent

Sales Manager

Territory Manager

Channel Sales Manager

Commercial Director

Sales Consultant

Relationship Manager

Business Development Executive

Regional Sales Director

Commission-based Consultant

Industries
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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