Commission vs Retainer: Payroll Rules for Agents

Paying sales agents is complicated. The Real Estate Industry Award 2020 has specific rules about Commission-Only employment and Debit-Credit systems.

The Debit-Credit System

Most agents are paid a retainer (Debit) which is recovered from their commission (Credit).
Example: Agent gets $50k retainer. They earn $100k commission. You pay them the remaining $50k commission.
Warning: You must track this balance carefully. If an agent leaves while in debit, you generally cannot deduct the debt from their final leave payout under the Award.

Commission Only Tests

To employ someone on "Commission Only" (no retainer), they must meet strict criteria:
1. They must be over 21.
2. They must have worked in the industry for at least 12 months in the last 5 years.
3. They must meet the Minimum Income Threshold (MIT) test (earning 125% of the award rate in previous years).