Where a sale commission goes: agency, agent, franchise and team

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Kooky

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

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A seller who signs a settlement statement sees one line for the agent: a single commission, paid to a single business. It is natural to picture that sum landing in the pocket of the person who ran the open homes. It does not. The money is owed to the agency, and from there it is divided along lines the seller never sees: tax, any fee owed to a brand, the salesperson's agreed share, the people who helped, superannuation.

This guide follows a sale commission from the moment the agency receives it. It covers who is legally owed the money, what comes off before anyone is paid, the different ways a salesperson can be engaged and what each means for the split, how teams divide a share, and when the money actually arrives. A worked example near the end follows one commission, dollar by dollar.

Reapit Real Estate Intelligence Report 2026 (sales from September 2025 to February 2026); Real Estate Industry Award 2020, clauses 15.2 and 16.7.

The commission is owed to the agency

In Queensland, a property agent is appointed in writing before doing any work, on the approved form known as the Form 6. The Real Estate Institute of Queensland's published commentary on the form notes that it carries the licensee's name, its business number and its licence number, and that under the Property Occupations Act 2014 it must state the commission and when it becomes payable.

The party on that form is the licensed agent, which for most offices is a company holding a real estate agent licence. The salesperson a seller deals with usually signs on its behalf. Section 89 of the Act, as summarised by the REIQ in a January 2025 case note, says a person cannot sue for, recover or keep a reward for acting as a property agent unless that person held the right licence, was authorised under it and was properly appointed. The entitlement to the commission is the appointed licensee's.

The seller has one contract, with the agency. The salesperson's income comes from a second, separate agreement: the one between the salesperson and the agency. The seller is not a party to it and has no say in it.

GST and outside agents come off first

The first deduction is tax. The REIQ's guidance on the Form 6 says the commission must be written inclusive of GST, so the rate a seller agrees to already contains the tax. One-eleventh of the amount received is GST the agency collects for the Australian Taxation Office. It is never anyone's income, and every split in an office is calculated on what remains.

The second deduction applies only to some sales. Where an outside agency shares in the commission under a conjunction arrangement, or a referral fee is owed to another business, that slice leaves before the office divides anything.

The Real Estate Industry Award 2020, the national instrument that sets minimum pay for employed salespeople, uses exactly this order. It defines the "employer's gross commission" as the commission the employer receives from a client for a transaction, less GST and conjunctional agent fees, and defines a conjunctional agent fee as the part of the commission paid to a real estate agent outside the employer's business. That defined figure is the base for the award's minimum commission-only rate, covered below.

Notice what the definition leaves in. Franchise fees, marketing levies, rent, portal subscriptions and administration wages are not subtracted to reach the employer's gross commission. For the award's purposes they are the agency's own costs.

The franchise group's share

Many Queensland offices trade under a national brand they do not own. The office is an independent business holding a franchise, and the brand is paid for the name, systems, training and marketing it supplies. IBISWorld's report on real estate agency franchises in Australia, dated March 2026, describes franchisees paying franchise, royalty and renewal fees in return for branding, marketing, administrative support and training.

In real estate these ongoing fees are commonly set as a percentage of the office's commission income, sometimes with a separate marketing levy calculated the same way. The percentages are set in each group's franchise agreement and disclosure document, and they differ from group to group and at times from office to office within a group. No published figure reliable enough to quote for a named group was found for this guide, so none is given. The worked example further down uses an assumed rate, labelled as an assumption.

This layer exists only for franchised offices. An independent agency pays no royalty, and carries the cost of its own brand, website, training and systems instead: the cost moves rather than disappears.

Whether the franchise fee reduces the salesperson's share depends on the salesperson's written agreement. Some agreements calculate the salesperson's percentage on the commission after GST only. Others calculate it on a "net" figure after the office has taken out the franchise fee or other listed costs. The same headline percentage produces a different payment depending on which base is used, which is why the base matters as much as the rate.

Four ways a salesperson is engaged

The largest decision in the split is how the salesperson is engaged. Australian real estate uses several models side by side, often inside the same office. The table sets out the four most common. The first three are forms of employment under the award. The fourth sits outside it.

Each row trades certainty against share. The more of the risk and cost a salesperson carries, the larger the percentage of each commission tends to be. A higher percentage is not, by itself, a higher income: it depends on how many sales there are to apply it to, and on what the salesperson pays for out of it.

Wage plus commission, and debit-credit

A salesperson employed on a wage is paid whether or not a home sells that month. The award sets a minimum weekly rate for each classification, and most licensed or registered salespeople sit at Level 2, described in the award as "Representative". Pay tables citing the award put the Level 2 rate from 1 July 2026 at $29.45 an hour, which over the award's 38-hour week is $1,119.10 a week, or $58,193.20 over 52 weeks.

Commission, for this employee, is an incentive on top. The award does not set its size. In a Full Bench decision dated 4 August 2020, the Fair Work Commission described the award's commission provisions as procedural: it fixes minimum wages, allowances and leave, but it does not stipulate how commission, bonuses or incentives are calculated. What it does require, in clause 16, is that any method or formula for calculating commission is evidenced in a written agreement, that later changes are in writing too, and that the employee receives a signed copy.

The debit-credit arrangement is a variation long used in the industry. The same Full Bench decision explains how it works. The employee is credited with an agreed percentage of the net commission generated from their sales. The costs of employing them are debited against that credit. When the account is in credit, the balance is payable to the employee. When it is in debit, nothing more is payable, and the negative balance carries over to the next period.

In practice, the wage acts as an advance that later commissions are measured against. The Commission was clear on the floor: whatever the state of the account, the employee must be paid, in each pay period, the minimum wage the award prescribes. It also noted that the award does not regulate the mechanics of these arrangements, which operate above the award's minimums. What may be debited is therefore a matter for the written agreement.

Commission-only employment in brief

A commission-only salesperson is still an employee, but receives no weekly wage: clause 14.3 of the award says the minimum weekly rate is not payable to them. In exchange, the award sets a floor under their share. Clause 16.7 puts the minimum commission-only rate at 31.5 per cent of the employer's gross commission, the figure defined earlier, after GST and any conjunctional fee and before the agency's other costs. Elite Agent reported in August 2017 that the Fair Work Commission's award review replaced an earlier formula, 35 per cent of the employer's net commission, with this one.

The arrangement is not open to everyone. Among other conditions set out in the award, the salesperson must have shown earnings of at least 125 per cent of their classification's annualised minimum wage in a 12-month period within the previous three years. The REIQ published that threshold as $69,634 from 1 July 2025; this magazine reported it at $72,938 from 1 July 2026, a figure consistent with the Level 2 rate above. The employer must review the salesperson's income each year. This magazine's separate guide to commission-only pay covers eligibility and the review in detail.

The contrast with the two models above is the point here. A waged salesperson's commission percentage is whatever the agreement says, with the wage as the safety net. A commission-only salesperson has no wage, and so the award guarantees the percentage instead. Agreements can, and often do, sit above 31.5 per cent.

Contractor and agent-led models

A fourth group of models moves most of the commission to the agent, along with most of the costs. The agent is not on the office payroll. They run what amounts to their own small business under a network's brand, and the network is paid by a share that is capped, a flat fee, or both. Section 26 of the Property Occupations Act allows the holder of a real estate agent licence to act alone, with others in carrying on a business, or as an employee of someone else, and how the licensing is arranged differs between networks.

The published descriptions of these models come from the networks themselves, through the trade press, and they date quickly. Elite Agent reported in October 2019 that eXp Realty, then launching in Australia, described a 70/30 split in the agent's favour until the agent had generated $100,000 in gross commission in a year, after which the company took no further share beyond a small transaction fee. In the same report the company said it, and not individual office owners, held the relevant licences. In June 2020 the same publication reported that another national network offered agents 93 per cent of commission as standard, and 100 per cent, less an administration fee, once an agent had paid $20,000 in service fees. Its chief executive, James Taylor, contrasted this with what he called an "industry standard of 45 per cent" for agents elsewhere. That 45 per cent is one executive's characterisation, not a measured average.

The chart places those published shares beside the award's commission-only floor.

The bars measure only the first cut. An employee on 45 per cent has an office, a wage or a guaranteed floor, administration, leave and super provided by the agency. An agent on 70 or 93 per cent typically funds their own car, phone, assistant, insurance and often their own marketing, pays the network's fees, and has no paid leave. Which arrangement leaves more at the end of a year depends on the agent's sales volume and costs, and the published descriptions do not settle that question for anyone.

Inside the salesperson's share: teams and shared sales

The salesperson's share is often not one person's income either. Two situations divide it further.

Listing and selling. In some offices, one salesperson wins the listing and a colleague introduces the buyer. Offices that recognise both contributions divide the salesperson's portion between a listing share and a selling share, in proportions fixed by office policy and each person's agreement. The award anticipates shared transactions for commission-only employees: where more than one employee works on a sale, clause 16.7 entitles each to at least the minimum rate in proportion to their part of the transaction, as agreed in writing.

Teams. Many high-volume salespeople now work as a small unit: a lead agent whose name is on the board, one or more associates who run inspections and call buyers, and sometimes an assistant handling administration. The team is usually paid from the lead agent's share. An associate may receive a wage, a percentage of each sale they work on, or both; an administrative assistant is more often on a wage alone. Whoever funds those wages, the associate and the assistant are generally employees of the agency, which is the licensed employer, so the award's minimums apply to them in their own right.

Super, payroll tax and leave

Three obligations sit on top of commission paid to an employee, and they are the agency's to meet.

Superannuation. The Australian Taxation Office lists all commissions, along with bonuses, among the qualifying earnings on which the super guarantee is calculated, and gives the rate as 12 per cent. Since 1 July 2026, under the ATO's payday super rules, the contribution must reach the employee's fund within seven business days of each payday. Contractors are not automatically outside the system: the ATO says contractors paid mainly for their labour are eligible for the super guarantee on the labour part of their invoice, even if they quote a business number.

Payroll tax. Queensland charges payroll tax on an employer's wages once its Australian payroll passes a threshold. Rate summaries citing the Queensland Revenue Office give the 2026-27 threshold as $1.3 million a year, with a rate of 4.75 per cent for employers paying up to $6.5 million in wages and 4.95 per cent above that, and a discount for regional employers. A single small office may sit under the threshold. A large office, or a group of related offices counted together, may not, and for those businesses each commission paid as wages adds to the taxable total. The Revenue Office also states that payments to contractors may be taxable where the arrangement is a relevant contract, so engaging agents as contractors does not by itself take those payments out of the calculation.

Leave. Employees accrue paid leave under the National Employment Standards whether they are on a wage, a debit-credit account or commission-only. For commission-only employees, clause 16.6 of the award says leave is paid at no less than the base rate of pay, meaning the minimum weekly wage for the classification, and that where an agreement pays more than the minimum commission-only rate, leave payments may be treated as a debit against that extra percentage if the agreement says so clearly. The award's 17.5 per cent annual leave loading is not payable to commission-only employees.

When the money arrives

A commission is agreed when the appointment is signed and becomes a real prospect when a contract goes unconditional, but nobody in the office is paid on either date. In a standard residential sale the agency is paid at or after settlement, commonly from the deposit it has been holding in trust.

For employees, the award then sets the clock. Clause 15.2 says an entitlement to commission, a bonus or an incentive payment becomes payable only once the employer has received cleared funds from its client, and that payment must be made within 14 days of that point. Clause 16.3 requires the employer to account to the employee in writing for each amount as it falls due.

The award also deals with a salesperson who leaves with sales in progress. Under clause 16.4, where employment ends for a reason other than serious misconduct, the former employee is entitled to commission if a legally enforceable contract for the property was in place before the end of the exclusive agency period. Where the employment ended for serious misconduct, the contract must have been in place before the employment ceased. The share is the same as if the person had stayed, unless the written agreement provides otherwise, and it is payable only once the client has paid the employer. Contractors have no such default: their position is whatever their contract says.

One commission, followed line by line

The following is a worked example with illustrative figures. It is not market data and it describes no particular office. The assumptions are these. A house sells for $900,000. The commission on the appointment is 2.33 per cent inclusive of GST, the Queensland average in Reapit's Real Estate Intelligence Report 2026, which drew on six months of sales to February 2026 recorded in its platform and was reported by Elite Agent on 28 May 2026. That report does not say whether its average includes GST; the example treats it as inclusive. No outside agent is involved. The office is franchised and pays its group a combined 8 per cent of commission after GST, a rate assumed purely for the arithmetic. The lead salesperson is an employee whose written agreement gives 45 per cent of the commission after GST, before the franchise fee, and who passes 20 per cent of that share to an associate. Super is paid on top at 12 per cent.

Read from the bottom up, the example shows how far each figure is from the one on the settlement statement. The lead agent's $6,862.91 is about a third of the $20,970.00 the seller paid, and it is still before income tax. The agency's $7,930.47 is not profit: it is what remains to pay rent, administration staff, software, insurance, any payroll tax, and the wages of salespeople during the months when nothing settles.

Change one assumption and the picture moves. Had the salesperson been a commission-only employee on the award's minimum, the share would be 31.5 per cent of $19,063.64, or $6,005.05. Had the agreement calculated the 45 per cent after the franchise fee, the base would be $17,538.55 and the share $7,892.35. Had an outside agency taken half the commission in conjunction, every line below GST would halve.

One commission is a small payroll in itself. The percentage on the appointment form says what the seller pays, and almost nothing about who receives it.

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 →