Commission-only agents: how the award's pay rules work in real estate

In this article

Written by

Kooky

Builder of Shaka, the payment router that pays every agent their commission on closing date.

About Kooky and Shaka →

The agent who sells a Queensland home is, in most cases, an employee. The commission the seller pays goes to the agency, and what the agent receives from it depends on an employment agreement that the seller never sees. For some agents that agreement provides a weekly wage with a commission on top. For others it provides no wage at all: every dollar they earn comes from sales they complete.

Commission-only employment is the arrangement outsiders find hardest to believe and many experienced agents prefer. It offers a larger share of each sale in exchange for giving up the certainty of a pay packet. Because it removes the wage floor that protects almost every other Australian employee, it is also tightly controlled. The rules are national, set by the Real Estate Industry Award 2020 under the Fair Work system, and they apply in Queensland exactly as they do elsewhere. This guide explains who qualifies, how the minimum share is worked out, when commission must be paid and what happens when earnings fall.

Real Estate Industry Award 2020; threshold as stated by the Real Estate Employers' Federation in Real Estate Business, 29 June 2026.

Three ways an employed agent is paid

The award recognises a range of pay arrangements for sales and property management staff, and they fall into three broad kinds.

The first is a wage alone. The award sets minimum weekly rates for four classification levels, from an associate in their first year through to an employee in charge of an office. An employee paid only the wage is entitled to at least the minimum for their level.

The second is a wage with commission, bonus or incentive payments on top. The employee keeps the security of the minimum rate and adds a share of what they sell. The award does not fix the size of that share. It requires the arrangement to be in writing.

The third is commission only. The employee receives no wage. Their whole remuneration is a share of the commission the employer earns on their sales, and the award sets a floor under that share.

All three are forms of employment. The award covers employers and their employees, and its rules are about what an agency owes the people it employs. They sit alongside State licensing law, which governs who may act as an agent and how clients appoint them.

A written agreement for every commission

One rule applies to every commission arrangement, whether or not a wage is paid as well. The award requires employers and employees to record it in writing. Any method of calculation, or any formula for calculating the amount of commission, must be set out in a written agreement.

The requirement mirrors the one that applies between agency and client, where the commission must be written on the appointment. In both relationships the law leaves the amount to the parties and insists on a record.

In practice the written agreement answers the questions that cause arguments. What percentage does the agent receive, and of what figure? Is it the same for a listing the agent won as for a buyer the agent introduced to a colleague's listing? What happens when two agents work on one sale? Is anything deducted before the percentage is applied? An agreement that deals with each of these gives both sides something to point to.

The award also places an accounting duty on the employer. As commission entitlements fall due, the employer must give the employee a written account showing them. An agent is entitled to see how their pay was arrived at.

Who can be employed on commission alone

The award allows a commission-only arrangement only where a list of conditions is met. Each is designed to keep the arrangement for people with the experience to make it work.

The exclusions do most of the work. A person new to the industry starts as a Level 1 associate, and Level 1 employees cannot be commission-only. A trainee cannot. A casual or part-time employee cannot. The result is that nobody begins a real estate career without a wage. The arrangement becomes available only after a salesperson has spent time on one and has a record to show.

The income test

The last condition in the table is the one with a dollar figure attached. The award calls it the minimum income threshold amount.

To pass, an employee must demonstrate annual remuneration of at least 125 per cent of the minimum rate for their classification, calculated as an annual amount. Commission and bonuses count towards the figure. Superannuation does not.

The period is flexible. The income can have been earned in any consecutive 12 months within the three years before the commission-only agreement is made. An agent who had a strong year two years ago and a quieter one since can rely on the strong year.

The award lists the evidence an employer may accept: individual payment summaries, pay slips, commission statements or sales records. An employer may also ask for a statutory declaration. An agent moving from one agency to another will usually bring records from the previous employer.

Because the threshold is a multiple of an award wage, it rises whenever the wage does. The Real Estate Employers' Federation, writing in Real Estate Business on 29 June 2026, put the figure at $72,938 gross from 1 July 2026, after the Fair Work Commission's annual wage review lifted award rates by 4.75 per cent. A year earlier the same publication reported the threshold as $69,634.

The minimum share: 31.5 per cent of gross commission

An employee who qualifies and agrees to work on commission alone is protected by a minimum rate. The award sets it at 31.5 per cent of the employer's gross commission, a term the award defines.

This is a floor. An agency and an agent may agree a higher share, and the written agreement will say what it is. They may not agree a lower one.

A worked example shows the scale. The figures are illustrative. Suppose the employer's gross commission on a sale, as the award defines it, is $20,000. The minimum the commission-only employee responsible for the sale can be paid is 31.5 per cent of $20,000, which is $6,300. The agency retains the rest to meet its own costs, and is free to have agreed to pay the agent more.

The award deals with shared sales as well. Where more than one employee contributes to a transaction, each is entitled to the minimum rate in proportion to the value of their part. In the example, if two commission-only agents were each credited with half of the sale, the minimum for each would be 31.5 per cent of $10,000, or $3,150.

The example also shows why the income test is not a trivial hurdle. At the minimum share, an agent would need the employer's gross commission on their sales to total about $231,549 in a year to earn $72,938, because $72,938 divided by 31.5 per cent is $231,549. With the illustrative commission of $20,000 a sale, that is 12 sales, since 11 sales would produce $69,300. Agents on a higher agreed share need fewer.

When commission has to be paid

The award ties the timing of an employee's commission to the timing of the employer's.

Commission becomes payable to the employee only once the employer has received cleared funds from the client. Until the agency has been paid, it does not owe the agent. In an ordinary residential sale that point comes at or shortly after settlement, when the agency's commission is released.

From then, the employer has 14 days. The award requires payment within 14 days of the entitlement becoming payable.

For a commission-only agent, this timing shapes the whole year. Income arrives in irregular amounts, weeks after the work that produced it. A contract signed in September on a 60-day settlement pays in November or December. A quiet winter shows up as a lean spring. People who thrive on commission alone tend to be those who have built a steady flow of listings and who budget across the year.

The link to cleared funds also means the agent shares the agency's risk on every sale. If a contract is terminated before settlement and the client owes the agency nothing under the appointment, the agency receives nothing and no commission becomes payable to the employee. The months of work on that sale are unpaid on both sides of the employment relationship. That shared exposure is part of what the higher share of a completed sale is paying for.

The annual review

Passing the income test once does not settle the matter. The award requires the employer to review a commission-only employee's gross income every year.

If the review shows that the employee's income has fallen below the threshold, the commission-only arrangement must cease. The employee does not lose their job. They move to an arrangement with a wage, and the minimum rate for their classification applies again.

The review is the safeguard that makes the system defensible. It prevents a commission-only arrangement from continuing year after year for someone it is no longer supporting.

It also explains why the annual change in the threshold matters to people already in the system. An agent whose income for the review year was $71,000 met a threshold of $69,634 and would not meet one of $72,938.

Leave, and what does not apply

A commission-only employee is still an employee, with the leave entitlements that go with employment. The award provides that leave is paid at no less than the employee's base rate of pay, and that the base rate is the minimum weekly wage for their classification level. An agent on annual leave is therefore paid at the award rate for their level, not at the average of their commission.

Other parts of the award are switched off. Commission-only employees are excluded from the provisions on minimum rates, which is the nature of the arrangement, and also from the award's standard allowances, most overtime rates and annual leave loading. The part-time and casual provisions do not apply because those employees cannot be commission-only.

The trade is visible in that list. A wage-earning salesperson who uses their own car for work is entitled under the award to a motor vehicle allowance. A commission-only agent is not: running costs come out of the larger share of commission that the arrangement is meant to deliver. Whether the larger share covers them is a calculation each agent makes for their own circumstances.

Commission after the job ends

Sales do not respect resignation dates. An agent may leave an agency with contracts signed and not yet settled, and listings under way that sell a month later. The award addresses what the departing employee is owed, and the answer depends on how the employment ended.

Where employment ended for serious misconduct, the award provides for commission only on sales where a legally enforceable contract existed before the termination.

Where employment ended for any other reason, the entitlement is somewhat wider. The employee is entitled to commission where the contract of sale is entered into before the exclusive agency period for that property expires.

Two practical points follow. A contract signed before the agent's last day, which settles afterwards, generally still produces a commission for them. And a listing the agent brought in can continue to count after they have gone, within the limits the award sets. As ever, the written agreement between agency and agent is the place to look for how these rules apply to a particular pay structure.

Super on commission

Superannuation is paid on commission as it is on wages, at the superannuation guarantee rate, which REI Super confirms is 12 per cent for 2026-27.

The timing changed on 1 July 2026 with the start of payday super. The Australian Taxation Office's guidance says super guarantee payments must now be paid at the same time as qualifying earnings, on payday, and be received by the employee's fund within seven business days. REI Super's notice to members lists commissions among the earnings that count.

For a commission-only agent that means a contribution should follow each commission payment within days, in place of one deposit after the end of the quarter. Combined with the award's 14-day rule, it gives each settled sale a short and predictable chain of payments: commission to the agency, commission to the agent, super to the fund.

How the rules came to look like this

The present design dates from a review of the award that the Fair Work Commission decided in 2017. The trade publication Elite Agent reported the outcome on 24 August 2017, in an explanation by Bryan Wilcox, chief executive of the Real Estate Employers' Federation.

Three things changed. The income threshold rose from 110 to 125 per cent of the award rate, which at the time meant an agent had to show at least $52,734 a year. The minimum commission-only share was redefined as 31.5 per cent of the employer's gross commission, replacing 35 per cent of the employer's net commission, a change of base as well as of rate. And the Commission considered and rejected a safety net of top-up payments, preferring the annual review.

The structure has been stable since. What moves each year is the wage table underneath it, and with it the threshold: from $52,734 at the time of the 2017 decision to $72,938 from July 2026.

Commission-only employment has been debated for as long as it has existed. Its critics point to the absence of a guaranteed income. Its supporters, who include many of the agents working under it, point to the higher share of each sale and the direct link between effort and reward.

The award's answer is to permit the arrangement for people who have already shown they can earn well above the minimum wage, to guarantee them a minimum share of what they bring in, to make the agency account for every payment, and to end the arrangement if it stops delivering. For a seller, none of this alters the commission on the appointment. It may explain a good deal about the person across the table, whose income this year depends on the sale settling.

Commission-only is not where a real estate career starts. Under the award it is a status an agent has to earn, and has to keep earning every year.

Kooky, from Shaka

Kooky edits Queensland Estate and builds Shaka, the payment router he made for Queensland property professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.

About Kooky and Shaka →