Employee sales commission agreements are essential in businesses that rely on sales as the primary source of revenue. These agreements help to incentivize employees to meet sales targets and ultimately increase the profitability of the business. A well-crafted employee sales commission agreement outlines the expectations and responsibilities of both the employer and employee, ensuring that all parties understand their roles and the rewards they are entitled to.

To help employers create an effective sales commission agreement, we have developed a comprehensive sample that can be customized to suit the needs of your business.

Employee Sales Commission Agreement Sample

This agreement (the “Agreement”) is made on the ________________ day of _________________, 20___, between [Employer’s Name] (the “Employer”) and [Employee’s Name] (the “Employee”).


The purpose of this Agreement is to establish the terms and conditions of the Employee’s sales commission compensation, which will be tied to the sales performance of the Employee.

Sales Commission

In consideration for the Employee’s sales performance, the Employee shall be entitled to receive a commission on the sales generated by the Employee. The commission rate shall be ___________________ percent of the net sales generated by the Employee.

Calculation of Commission

The commission shall be calculated as follows:

Net sales generated by the Employee x Commission Rate = Commission payable to the Employee.

Payment of Commission

The commission payable to the Employee shall be paid on a __________________ basis (e.g., weekly, bi-weekly, monthly) and shall be subject to all applicable taxes and other deductions required by law.

Sales Targets

The Employee shall be responsible for meeting the sales targets set by the Employer. The sales targets shall be set by the Employer and communicated to the Employee in writing. The Employee shall be required to meet the sales targets in order to be eligible for commission compensation under this Agreement.


Either party may terminate this Agreement upon giving written notice to the other party. Upon termination, the Employee shall be entitled to receive any outstanding commission due under this Agreement.


The Employee shall maintain the confidentiality of all information related to the Employer’s business and shall not disclose such information to any third party without the Employer’s prior written consent.

Governing Law

This Agreement shall be governed by and construed in accordance with the laws of the state of _______________________.

Entire Agreement

This Agreement represents the entire agreement between the parties and supersedes all prior negotiations, representations, and agreements, whether oral or written.


This Agreement may only be modified in writing signed by both parties.


In summary, an employee sales commission agreement is a crucial tool for any business that relies on sales as its primary source of revenue. It ensures that both the employer and employee are clear on their expectations and responsibilities, and also serves as a motivational tool to incentivize employees to meet sales targets and drive profitability. The sample agreement provided offers a comprehensive starting point for businesses looking to create a sales commission agreement that is tailored to their specific needs.