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Commission payments should be carefully scrutinized

Employees work hard for the money they earn. For employees who count on commission payments, these payments need to come in on time and in the correct amount. Unfortunately, this doesn't always happen. Sometimes, employers make mistakes with calculations, but this might come down to willful refusal to pay employees what they are due.

The commissions have to be calculated based on the employment contract that the employee has with the company. Employee who rely on commissions for part or all of their income should understand the type of commission they receive. Additionally, they should keep a few tips in mind about tracking these payments.

3 commission payment structures

There are three types of payment structures that are used for commission payments. Each of these has benefits and down sides so you need to ensure that your arrangement will enable you to earn what you need.

One structure is "straight commission." In this instance, you rely only on commission payments to earn a living. You don't make any other salary.

Another structure is "draw against commission." In this case, you choose how much money to borrow against your sales commission for the pay period. When the period closes, you repay that amount from your commission payment. Anything over that amount is what pay you will bring home.

The third type is having a base salary plus commission payments. This enables you to earn a specific amount of money throughout the year. Any commission you earn is on top of the base payments. The salary can be hourly or salary, depending on the arrangement.

Tracking commission

If the company for which you work allows customers to return items for a refund, you might find that your commission fluctuates unpredictably even if you are making sales. Most companies have a system that enables you to check the commission amount that you can expect based on the sales and returns for any given pay period. Other companies might hold commission payments for a specific amount of time. Make sure that you understand this so that you know what to look for in your paycheck.

Discrepancies can occur

When you notice that there is a discrepancy in your commission, your priority has to be correcting the discrepancy. You might be able to do this directly with your employer. If not, you may have to take legal action to correct the issues.

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