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Commission Draw Agreement Template for Singapore

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Key Requirements PROMPT example:

Commission Draw Agreement

"I need a Commission Draw Agreement for a Singapore-based real estate agency hiring new sales agents, with a monthly draw of $3,000 and tiered commission rates starting at 2% for residential properties, effective March 1, 2025."

Document background
Commission Draw Agreements are essential documents in Singapore's employment landscape, particularly in sales-driven industries. This document type is used when employers wish to provide sales representatives with steady income through draws while maintaining a commission-based compensation structure. The Commission Draw Agreement must comply with Singapore's Employment Act and CPF requirements, clearly outlining the draw amount, commission calculations, reconciliation periods, and recovery terms. It serves to protect both employer and employee interests by establishing clear parameters for earnings, payments, and obligations.
Suggested Sections

1. Parties: Identifies and defines the contracting parties

2. Background: Provides context and purpose of the agreement

3. Definitions: Defines key terms used throughout the agreement

4. Commission Structure: Details the commission rates, calculation methods, and earning criteria

5. Draw Terms: Specifies the draw amount, payment frequency, and recovery mechanisms

6. Reconciliation Process: Outlines how and when commission earnings are reconciled against draws

7. Payment Terms: Details payment timing, methods, and deductions

8. Term and Termination: Specifies duration and termination conditions

Optional Sections

1. Non-Competition: Restricts competitive activities when protecting business interests is crucial

2. Bonus Structure: Additional incentive arrangements for performance-based bonuses beyond commission

3. International Sales: Special provisions for international transactions when sales territory includes multiple countries

Suggested Schedules

1. Commission Rate Card: Detailed breakdown of commission rates by product/service

2. Sales Territory Map: Definition of geographical sales boundaries

3. Performance Targets: Specific sales targets and corresponding commission tiers

4. Draw Calculation Examples: Illustrative examples of draw 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



































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Industries

Employment Act (Chapter 91): Primary legislation governing employment relationships in Singapore, covering basic terms of employment, salary protection provisions, payment periods and methods, particularly relevant for structuring commission and salary arrangements

Employment Claims Act 2016: Framework for handling employment disputes and salary-related claims, including mechanisms for resolving commission-related disputes

Income Tax Act: Governs taxation of commission payments, withholding tax obligations, and CPF contribution requirements for commission-based compensation

Central Provident Fund Act: Regulates employer's obligations for CPF contributions on commission payments and treatment of draw payments in social security context

Contract Law (Common Law): Fundamental principles governing contract formation, terms and conditions, and rights and obligations of parties in Singapore's common law system

MOM Guidelines: Ministry of Manpower's regulatory framework covering employment practices, salary payment regulations, and commission structure guidelines

Personal Data Protection Act 2012: Legislation governing the handling and protection of personal information in employment contracts and records

Competition Act: Ensures commission structures and business practices comply with anti-competitive regulations in Singapore

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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