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Commission Worksheet - Version 2

Step 1 - Gross Commissions

If you've set up pre-defined commission structures, you can apply a commission structure to the worksheet in order for Rex to calculate the gross commission automatically.

  1. Select the correct commission structure from the 'apply commission structure' drop-down. This will add the gross commission.
  2. If you don't have pre-defined commission structures, you can manually calculate the commission owed and add the amount to the 'gross commission' field.
  3. Click 'Save Changes'
By default, the gross commission should be entered excluding any GST component. If the amount you've entered includes GST, tick the checkbox 'inc GST'.
 

Step 2a - Referral Fees & Related Expenses

If the Listing was sold through a referral you can add the referral fee to the Commission Worksheet.

  1. Click 'Add referral fee or related expense'.
  2. Use the ‘expense description’ drop-down to select the expense type. Alternatively, you can enter the description manually. (Note: the drop-down list will show all pre-set deductions, not just those associated with referrals.)
  3. If you've selected one of the list entries, the expense amount will be calculated automatically. This can be adjusted as necessary. If you manually entered a description, you'll need to enter an amount. 
  4. To the right of the 'amount' field are two buttons:
  • '$' allows you to enter the amount of the expense. This is the default entry type.
  • '%' allows you to enter the percentage of gross commission net of GST that the expense is calculated from.

If you need to add another referral fee or related expense, click 'Add another deduction' and repeat the steps above.

 

Step 2b - Franchise, Marketing & Related Fees

Use this section of the commission worksheet to add any agency fee deductions. Click Add franchise, marketing related or other fees.

From here, follow the same steps as described in the Referral Fees and Related Expenses section to enter the appropriate deductions.

 

Step 3 - Award Allocation

The Award Allocations section is used to record the involvement and contribution of effort from different Agents in your office to a sale (or lease). Rex allows you to record this as a proportion (%) per Agent, with all the Agents involved in the sale making up a final total of '100%'. 

The amount you will enter for each Agent will depend on the way your office runs. However, there are a few common models: 
  • A single Agent lists and sells the property. In this case, that Agent would be rewarded the full 100%.
  • Two Agents (one that lists the Property, another that sells the Property) split the allocated award: I.e. Listing Agent (60%), Selling Agent (40%) - OR sometimes Listing Agent (70%), Selling Agent (30%). (For further clarification, see the bottom of this article). 
  • Two Agents and a marketing Agent: I.e. Listing Agent (50%), Marketing Agent (10%), Selling Agent (40%)

If you don't believe this model applies to you:

  • Try and split the award evenly between each Agent involved - this allows Rex to continue tracking basic KPIs (see below) - e.g. 50%:50% for two Agents or or 33.3%:33.3%:33.4% for 3 Agents. 
  • In Step 4, enter each Agent's individual payable commission in dollar figures (instead of as a percentage of commission contributed).
Note: The awards figure is used not only within this worksheet but also as an overall KPI to help you identify your best performing agents based on gross commission and/or transaction volume (see the reporting section).
 

How to add awards:

  1. Click Add agent award allocation.

  2. In the Agent field use the drop-down to select the first Agent.

  3. Use the Listing/Selling drop-down to select how the Agent was involved in the sale.

  4. In the Award Allocation (% resp. for sale) field, enter the award allocation/commission contribution for the Agent. If only one Agent is involved in the sale, this number should be 100%.

  5. If another Agent was involved in the sale, click Add Agent and repeat the above steps using the appropriate values.

  6. Continue until you've allocated the full 100% of the responsibility for the sale.  (Note: Rex won't let you save the Commission Worksheet until you've done so).

  7. Click Save Changes.

A concrete example

  • John and Mary sell a Property together, bringing in a combined distributable commission of $10,000 (remember that distributable commission is gross commission after gst, referral fees and franchise fees have been removed).

    Mary is the Listing Agent and John is the Selling Agent. In our example agency, the Listing Agent is seen to be responsible for more of the transaction than the Selling or Leasing Agent. 
    • Mary - as the Listing Agent - is 'awarded' 60% of the sale based on the effort required to obtain the Listing, perform open homes and maintain an owner over an extended period of time. As such, you'd record an award rate of 60%. In effect, this means Mary is responible for bringing $6,000 of the $10,000 of commission to the Agency.

      When we go to determine how much of the commission should be passed on to Mary in Step 4, we are working with how much money she actually brought into the office: $6,000.
       
    • John - as the Selling Agent - is 'awarded' 40% of the sale based on the effort required to find a buyer and negotiate the final price of the Listing. Record an award rate of 40%. In effect, this means John is responsible for bringing $4,000 of the $10,000 of commission to the Agency.

      When we go to determine how much of the commission should be passed on to John in Step 4, we should keep in mind the proportion of commission he is actually responsible for bringing into the office $4,000.

 

Step 4 - Agent Commission Breakdown

Once you've allocated the Agent award percentages, Rex will update the 'Agent Commission Breakdown section.

This section is used to help you determine each Agents' net commission payable amount. Individual Agents will each have a separate section where you can set their earned commission and add any Agent Deductions. 

The 'maximum payable commission' is a quick guideline representing the maximum amount you should pay the Agent based on their responsibility for the sale (determined in Step 3). In theory, paying the Agent more than this amount means you're effectively making a loss on the sale as an office.

For example, let's say two Agents are involved in a sale generating $10,000 in distributable commission, and one of the Agents was responsible for 60% of the sale (equivalent to $6,000). If you choose to pay the Agent $7,000 in commission when they only brought in $6,000 (the maximum payable commission amount), you're making a loss of $1,000.

Percentage vs Dollar Amounts

Agencies have extremely varied agreements with their Agents in regards to how earned commission on a sale is calculated. To accomodate for these varying scenarios, when entering an Agent's earned commission, Rex allows you to do so by inserting either a percentage or dollar figure. Let's go into a little further detail. 

Possible Scenarios:

  • Some Agencies simply pay Agents a fixed percentage on each dollar they bring in to the office. If this sounds like you, select the percentage '%' entry.

    Following on from the above example, if an Agent brought in $6,000, and we had an agreement to pay them 20c on every dollar they brought into the office, we would simply enter '20%' and the system would calculate their earnings. 
  • Alternatively, some Agencies pay Agents a fixed fee per sale: e.g. $1,000. In this situation, you should select the fixed '$' entry, before entering your fixed fee into the appropriate field. 
  • Finally, some Agencies have quite complex tiers and calculations based on the amount of money Agents bring in in terms of released funds over a month, quarter, etc. In these situations, use the fixed dollar entry.


Entering the Agent's gross payable amount:

  1. To set the gross amount the Agent will receive, use '$' or '%' at the right of the ‘amount to agent’ field to select a 'fixed amount' or a 'percentage' respectively.
  2. Enter the value into the 'amount to agent' field.
  3. Click 'Save Changes'.

To add Agent Deductions:

From here, you'll be able to apply any deductions to the Agent's earnings that relate specifically to the sale at hand. (This might include gifts, advertising overspend, etc).

  1. The steps are identical to those described above in other sections for managing deductions.
  2. To add more lines, click 'Add another deduction'

Using the Commission Settings section of Rex, you can also set up default Agent Deductions that pre-populate whenever an Agent is added to a Commission Worksheet. If any of these pre-set deductions are present, they'll automatically calculate the deduction amount based on how they were set up.

You can adjust the fixed amount '$' or percentage '%' of these deductions for individual Commission Worksheets as necessary.

 

Step 5 - Office Commission Summary


You should've noticed by now that at no point did you enter the amount of commission that the office will receive.

This is because the office receives whatever is left over of the distributable commission after the gross Agent payable amounts are taken out. 

Basically; anything left over once everyone else has been paid belongs to the Agency.

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