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Salary Plus Commission Agreement Template for Hong Kong

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Key Requirements PROMPT example:

Salary Plus Commission Agreement

"I need a Salary Plus Commission Agreement for a senior sales manager position in the software industry, with a tiered commission structure based on quarterly targets and a team override commission for managing five direct reports, to commence March 1, 2025."

Document background
The Salary Plus Commission Agreement is essential for businesses operating in Hong Kong that employ sales professionals or other revenue-generating roles where compensation includes both fixed and variable components. This agreement provides legal protection for both employer and employee by clearly defining the base salary, commission structure, performance expectations, and payment terms. It ensures compliance with Hong Kong employment laws, including the Employment Ordinance and Minimum Wage Ordinance, while establishing transparent mechanisms for calculating and distributing commission-based compensation. The document is particularly valuable in industries with complex sales cycles, multiple product lines, or tiered commission structures, and helps prevent disputes by clearly documenting all aspects of the compensation arrangement.
Suggested Sections

1. Parties: Identifies the employer and employee with their full legal names and addresses

2. Background: Brief context of the employment relationship and purpose of the agreement

3. Definitions: Defines key terms used throughout the agreement, including commission-related terminology

4. Appointment and Duration: Details of the position, commencement date, and term of employment

5. Duties and Responsibilities: Outline of the employee's key responsibilities and performance expectations

6. Base Salary: Details of the fixed salary component, payment frequency, and review mechanisms

7. Commission Structure: Detailed explanation of commission calculations, qualifying sales/transactions, and payment terms

8. Payment Terms: Timing and method of salary and commission payments, including any holdback periods

9. Targets and Performance Metrics: Specific sales or performance targets that affect commission earnings

10. Working Hours and Location: Standard working hours, location, and any flexibility arrangements

11. Leave Entitlements: Annual leave, sick leave, and other leave entitlements as per Hong Kong law

12. Termination: Conditions and procedures for termination by either party

13. Post-Termination Commission: Treatment of commission for deals closed before but paid after termination

14. Confidentiality: Protection of confidential information and trade secrets

15. Governing Law: Specification of Hong Kong law as governing law and jurisdiction

Optional Sections

1. Probation Period: Details of initial probation period if applicable, including any modified commission terms

2. Non-Compete and Non-Solicitation: Restrictions on post-employment activities, if required for senior sales positions

3. Expense Reimbursement: Policy on business expense reimbursement if applicable to the role

4. Benefits: Additional benefits beyond statutory requirements such as health insurance or car allowance

5. Bonus Arrangements: Any additional bonus schemes beyond the commission structure

6. Intellectual Property: IP rights provisions if employee may create intellectual property in their role

7. Remote Working: Provisions for remote work arrangements if applicable

8. Team Commission Structures: For roles involving team sales or management commission splits

Suggested Schedules

1. Schedule 1: Commission Rates: Detailed breakdown of commission percentages, tiers, and any accelerators

2. Schedule 2: Sales Territory: Definition of geographical territory or client accounts assigned to employee

3. Schedule 3: Performance Metrics: Detailed KPIs and calculation methodologies for performance assessment

4. Schedule 4: Product/Service List: List of products/services qualifying for commission and their respective rates

5. Appendix A: Commission Calculation Examples: Practical examples showing how commission is calculated in various scenarios

6. Appendix B: Monthly Report Template: Template for tracking and reporting sales and commission calculations

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions









































Clauses








































Relevant Industries

Financial Services

Real Estate

Insurance

Technology Sales

Telecommunications

Retail

Manufacturing

Professional Services

Media and Advertising

Pharmaceutical Sales

Automotive

Consumer Goods

Industrial Equipment

Software and SaaS

Recruitment and Staffing

Relevant Teams

Sales

Business Development

Account Management

Commercial

Revenue

Marketing

Product Sales

Channel Sales

Enterprise Sales

Solutions

Business Solutions

Direct Sales

Indirect Sales

Inside Sales

Field Sales

Relevant Roles

Sales Representative

Business Development Manager

Account Executive

Sales Manager

Regional Sales Director

Commercial Director

Real Estate Agent

Insurance Agent

Recruitment Consultant

Marketing Manager

Product Specialist

Channel Manager

Solutions Architect

Enterprise Account Manager

Inside Sales Representative

Sales Engineer

Business Development Executive

Territory Manager

Commission-based Consultant

Industries






Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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