Salary Plus Commission Agreement Template for Pakistan

A comprehensive employment agreement governed by Pakistani law that establishes a hybrid compensation structure combining a fixed base salary with performance-based commission payments. The agreement details the terms of employment, commission calculation methodologies, performance expectations, and payment terms while ensuring compliance with Pakistani labor laws, tax regulations, and social security requirements. It includes provisions for sales targets, territory assignments, reporting structures, and protection of the employer's business interests through confidentiality and non-competition clauses.

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What is a Salary Plus Commission Agreement?

The Salary Plus Commission Agreement is essential for businesses in Pakistan that employ sales professionals or other revenue-generating roles where performance-based compensation is appropriate. This agreement type combines the security of a fixed base salary with the incentive structure of commission payments, making it particularly suitable for sales-oriented positions. It needs to comply with Pakistani employment laws, including the Industrial and Commercial Employment Ordinance 1968 and relevant tax regulations. The document typically includes detailed commission structures, performance metrics, territory assignments, and protection mechanisms for both employer and employee interests. Used primarily when hiring sales professionals, business development managers, or other roles where compensation is partially tied to performance outcomes.

What sections should be included in a Salary Plus Commission Agreement?

1. Parties: Identification of the employer and employee with complete legal names and addresses

2. Background: Brief context of the employment relationship and purpose of the agreement

3. Definitions: Key terms used throughout the agreement including 'Commission', 'Sales', 'Territory', 'Customers', etc.

4. Employment Terms: Basic terms of employment including position, duties, and reporting structure

5. Base Salary: Details of the fixed salary component including amount, payment frequency, and review process

6. Commission Structure: Detailed explanation of commission calculation, rates, and qualifying sales

7. Payment Terms: Timing and method of salary and commission payments, including any holdback periods

8. Performance Expectations: Sales targets, quotas, and minimum performance requirements

9. Term and Termination: Duration of agreement and conditions for termination

10. Confidentiality: Protection of company information and trade secrets

11. Non-Competition: Restrictions on working with competitors during and after employment

12. Governing Law: Specification of Pakistani law as governing law and jurisdiction

13. Entire Agreement: Standard clause confirming this document as the complete agreement between parties

What sections are optional to include in a Salary Plus Commission Agreement?

1. Territory Assignment: Used when the employee is assigned specific geographic areas or customer segments

2. Expense Reimbursement: Include when the employee is eligible for business expense reimbursement

3. Training Requirements: When specific training or certification requirements apply to the role

4. Team Leadership Bonus: Include if the employee has team leadership responsibilities with additional compensation

5. Remote Work Provisions: Include for positions allowing work from home or remote locations

6. Vehicle Allowance: When the role requires extensive travel and includes vehicle benefits

7. International Sales: Include when the role involves international customers or territories

8. Intellectual Property: When the role involves creation of intellectual property or customer relationships

What schedules should be included in a Salary Plus Commission Agreement?

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

2. Schedule B - Sales Targets: Quarterly/annual sales targets and any escalating commission structures

3. Schedule C - Territory Map: Geographical boundaries or customer assignments if applicable

4. Schedule D - Bonus Structure: Additional performance-based incentives or bonus calculations

5. Schedule E - Expense Policy: Detailed policies regarding reimbursable expenses and procedures

6. Appendix 1 - Commission Calculation Examples: Sample calculations showing how commissions are calculated in various scenarios

7. Appendix 2 - Reporting Templates: Standard forms for sales reporting and commission claims

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

Cost

Free to use

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