Piece rates & commission payments

Some employees can be paid piece rates or commission payments.

Employees paid piece rates and commission payments are paid by results instead of getting an hourly or weekly pay rate. This means the amount the employee earns each week will vary depending on how much work they do.

    Piece rates

    A piece rate is where an employee gets paid by the piece. This means the employee gets a pay rate for the amount picked, packed, pruned or made.

    When piece rates are paid, they apply instead of the hourly or weekly pay rate. An employee can be hired to work a mix of piece rates and hourly rate shifts.

    When can an employee be paid piece rates?

    An employee can be paid piece rates when:

    • an award or registered agreement allows for piece rate payments
    • the employee isn’t covered by an award or registered agreement and they get a pay rate based on how much work they do.

    There has to be a written and signed piecework agreement setting out the pay rate per piece and how it is measured. An employer has to keep the agreement as part of their records and give a copy to the employee. 

    If the agreement is varied, it must be agreed to in writing by the employee and employer.

    Commission payments

    A commission payment is an amount paid to an employee based on how much they sell.

    Normally, the commission payment is calculated as a fee or percentage of the employee’s total sales. A commission payment can be called a ‘bonus’ or ‘incentive payment’.

    A commission payment can:

    • be paid as an extra incentive on top of an employee’s pay or
    • make up an employee’s whole wage (commission only payments).

    When can an employee be paid commission as an incentive?

    An employee can be paid commission as an incentive at any time.

    An award or registered agreement can set out rules about how this can be done.

    When can an employee be paid commission only?

    An employee can be paid on a commission only basis when an award, enterprise agreement or other registered agreement states an employee can be paid this way.

    For rules about paying award and agreement free employees on a commission only basis see Award and agreement free wages and conditions.

      An award or registered agreement can set out specific rules about how the commission can be paid.

      Find information about piecework arrangements and commission payments in your award by selecting from the list below.

      Real Estate Award

      Based on what you've told us, it looks like you're covered by the Real Estate Industry Award 2010 [MA000106]. 

      Commission payments as an incentive

      An employee and employer can agree that the employee will be paid commission payments as an incentive on top of their minimum weekly pay.

      Any commission payment arrangements need to be in writing and include how the employee’s commission will be calculated. The employer has to keep a copy of the agreement and give a signed copy to the employee. 

      An employee has to be told in writing how much commission was earned when it is paid. The commission arrangement can be changed if the employer and employee agree to it in writing. 

      Commission payments when employment ends

      Dismissed for serious misconduct

      If an employee entitled to incentive commissions is dismissed for serious misconduct they have to be given a portion of their commission when: 

      • there is an enforceable sale or lease real estate contract in place before the employment ends
      • the employer is paid commission under a sale or lease real estate contract
      • the commission is cleared into the employer’s bank account.

      Resigns or dismissed for any other reason

      If an employee entitled to incentive commissions resigns or is dismissed, other than for serious misconduct, they have to be given a portion of their commission when: 

      • there is an enforceable sale or lease real estate contract in place before the end of the exclusive agency period
      • the employer is paid commission under a sale or lease real estate contract
      • the commission is cleared into the employer’s bank account.

      Exclusive agency period means the time during which the employer has the exclusive right to sell or lease a property.

      Commission only payments

      An employee can agree with their employer to be paid on a commission only basis if the employee: 

      • has a real estate agent’s license or is registered or permitted to do the work of a real estate salesperson under real estate law
      • has worked in property sales or commercial, industrial or retail leasing as a Real Estate Employee Level 2 or higher, or has operated their own real estate business (which involved the sale of property or businesses) for at least 12 consecutive months in the last 3 years
      • is at least 21 years old
      • is not a casual, a junior, a Real Estate Employee Level 1 or a trainee
      • from the first pay period on or after 30 June 2019, is not a part-time employee
      • can demonstrate that they have achieved the minimum income threshold (unless they have operated their own real estate business within the last 3 years). 

      Any commission only payment arrangement needs to be in writing and include how the commission will be calculated. The employer has to keep a copy of the agreement, and give a copy to the employee.

      The commission arrangement can be changed if the employer and employee agree to it in writing. 

      A commission only employee has to be:

      • told in writing what commission was earned when it is paid
      • paid at least the minimum commission only rate for each sale or lease transaction they are responsible for (unless the commission is split between 2 or more responsible employees)
      • paid at least the minimum wage for their classification for any National Employment Standard (NES) leave entitlements (such as annual leave and sick leave) at the time the leave is taken.

      The minimum commission only rate is 31.5% of the employer’s gross commission. The employer’s gross commission is the commission an employer gets for sales or leasing transactions less GST and conjunctional agent fees. 

      If an employer agrees to pay more than the minimum commission only rate, how the additional commission is to be calculated must be agreed in writing, with a signed copy of the agreement provided to the employee. 

      Minimum income threshold amount 

      On 2 April 2018 changes were made to the minimum income threshold.

      To meet the minimum income threshold after 2 April 2018, the employee has to show that over a single 12 month period in the previous 3 years, they were paid an amount (including commission or bonus payments) at least equal to:

      • the minimum annual rate for their classification under the award 
      • an extra 25%. 

      The employer can rely on any information from any past employer supplied by the employee, including payment summaries, pay slips and commission statement records. The employer can request that the employee supply a statutory declaration about the accuracy of the information.

      Employees being paid on a commission only basis prior to 2 April 2018 can continue to be paid this way as long as their gross income is reviewed annually. See Reviewing commission only payments below. 

      Reviewing commission only payments

      A commission only employee's gross income must be reviewed annually. Employees already being paid commission only before 2 April 2018 must have their gross income reviewed by 2 April 2019. 

      If their income falls below the minimum income threshold, they can't continue to be paid as a commission only employee. 

      Employees who stop being paid commission only because their income fell below the minimum income threshold can enter into another commission only arrangement if:

      • they meet the minimum income threshold over a single 12 month period in the subsequent 3 years
      • the 3 year period starts no earlier than the date the employee stopped being paid on a commission only basis.

      Splitting commission payments

      Where 2 or more employees are separately responsible for different parts of a sale or lease, the employees’ part of the gross commission is split.

      Each commission only employee responsible for 1 or more parts of the sale or lease gets a portion of the commission according to the part of the transaction they were responsible for. They each get at least the minimum commission only rate proportionate to the value of each part. 

      The proportionate value for each part has to be agreed to in writing between the employer and employee. 

      The parts of the transaction can include:

      • commercial leasing of a property
      • listing a property or business
      • managing the listing of a property or business
      • selling a property or business
      • nurturing a contract to completion.

      Commission payments when employment ends

      Dismissed for serious misconduct

      If a commission only employee is dismissed for serious misconduct they have to be given a portion of their commission when: 

      • there is an enforceable sale or lease real estate contract in place before the employment ends
      • the employer is paid commission under a sale or lease real estate contract
      • the commission is cleared into the employer’s bank account.

      Resigns or dismissed for any other reason

      If a commission only employee resigns or is dismissed, other than for serious misconduct, they have to be given a portion of their commission when: 

      • there is an enforceable sale or lease real estate contract in place before the end of the exclusive agency period
      • the employer is paid commission under a sale or lease real estate contract
      • the commission is cleared into the employer’s bank account.

      Exclusive agency period means the time during which the employer has the exclusive right to sell or lease a property.

      To find out more about who this award applies to, go to the Real Estate Award summary.

      Source reference: Real Estate Industry Award 2010 [MA000106] clauses 15-17 external-icon.png

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