Employer Employee Sales Commission Agreement for Singapore

Employer Employee Sales Commission Agreement Template for Singapore

This agreement is a legally binding document governed by Singapore law that establishes the terms and conditions of employment for sales personnel working on a commission basis. It outlines the commission structure, payment terms, performance expectations, and compliance with Singapore's Employment Act and CPF requirements. The agreement provides clarity on sales targets, territory assignments, and the calculation and payment of commissions while ensuring adherence to local employment regulations and tax obligations.

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What is a Employer Employee Sales Commission Agreement?

The Employer Employee Sales Commission Agreement is essential for businesses in Singapore engaging sales professionals on a commission-based compensation structure. This document provides a comprehensive framework for the employment relationship, detailing commission calculations, payment schedules, and performance expectations while ensuring compliance with Singapore's Employment Act, CPF requirements, and tax regulations. It's particularly crucial for protecting both employer and employee interests in variable compensation arrangements and establishing clear metrics for success.

What sections should be included in a Employer Employee Sales Commission Agreement?

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

2. Background: Context of employment relationship and purpose of commission agreement

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

4. Appointment: Terms of employment and role description

5. Commission Structure: Detailed explanation of commission calculations and rates

6. Payment Terms: Timing and method of commission payments, including CPF contributions

7. Obligations of Employee: Key responsibilities and performance requirements

8. Term and Termination: Duration of agreement and termination provisions

9. Confidentiality: Protection of company confidential information and trade secrets

10. Governing Law: Specification of Singapore law as governing law and jurisdiction

What sections are optional to include in a Employer Employee Sales Commission Agreement?

1. Territory Assignment: Geographic or client portfolio limitations, used when employee is assigned specific territory or client base

2. Expense Reimbursement: Terms for business expense claims and reimbursement procedures

3. Training Requirements: Mandatory training and development obligations for the role

4. Team Management: Provisions for managing other sales staff, for senior sales positions

5. Non-Compete: Restrictions on post-employment competition, subject to reasonableness requirements under Singapore law

What schedules should be included in a Employer Employee Sales Commission Agreement?

1. Schedule 1 - Commission Rate Card: Detailed breakdown of commission rates, tiers and calculation methods

2. Schedule 2 - Sales Territory Map: Geographic boundaries or client list assignments

3. Schedule 3 - Performance Metrics: KPIs and target specifications for commission qualification

4. Schedule 4 - Expense Policy: Detailed guidelines for expense claims and reimbursement limits

5. Schedule 5 - Product Price List: Current pricing for products/services being sold

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

Jurisdiction

Singapore

Publisher

Genie AI

Document Type

Sales Agreement

Sector

Sales

Cost

Free to use
Relevant legal definitions
Clauses
Industries

Employment Act (Cap. 91): Primary legislation governing employment relationships in Singapore. Covers basic terms and conditions of employment, salary payments, working hours, and leave entitlements. 2019 amendments extend coverage to all employees except seafarers, domestic workers, and public servants.

Central Provident Fund (CPF) Act: Mandates employer and employee contributions to CPF. Critical for commission-based compensation calculations and requirements for CPF contributions on commission payments.

Income Tax Act: Governs tax treatment of commission-based income, including reporting requirements for variable income and withholding tax obligations.

Employment Claims Act: Establishes dispute resolution mechanisms, salary-related claims procedures, and jurisdiction of Employment Claims Tribunal.

Personal Data Protection Act (PDPA): Regulates protection of employee's personal data, including consent requirements and data collection/storage obligations.

Contract Law: Common law principles governing basic contract formation, requirements for valid consideration, and terms/conditions enforcement.

Competition Act: Regulates restrictions on non-compete clauses and market competition considerations in employment agreements.

Commission Structure: Key agreement component covering commission calculation methods, payment terms, frequency, and minimum wage compliance.

CPF Calculations: Specific provisions for calculating CPF contributions on commission-based income.

Performance Metrics: Definition of sales targets, performance evaluation criteria, and territory/client allocation.

Confidentiality Provisions: Terms governing non-compete obligations and protection of confidential information.

Termination Conditions: Specific circumstances and procedures for contract termination, notice periods, and final commission settlements.

Dispute Resolution: Procedures and mechanisms for resolving disputes between employer and employee regarding commission payments or other contract terms.

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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