FLSA Overtime Calculator Advisor

COMMISSIONS

A commission is a sum of money paid to an employee based on the sale of a certain amount of goods or services. Commissions may be paid in the form of compulsory (or mandatory) service charges expressed as a specific percentage of the customer’s bill (for example, charges imposed when a hotel rents out banquet facilities to a group).  A commission may be paid in addition to or instead of any other method of pay.

Some commission agreements include a "draw" on commissions. A draw is a fixed sum of money paid in advance of the settlement date for the earned commission pay. Draws usually bear a fixed relationship to the amount of commission payments which, based on experience, the employee may be expected to earn for the period. Draws are usually paid weekly, bi-weekly, or at some other fixed interval.

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