What is a sales commission draw?
A draw is money paid to a rep ahead of earned commission and reconciled against future payouts. It gives a rep predictable support while the plan still records what has been earned.
By Commishify Editorial Team · Published · Last reviewed
The basic idea
A draw may be recoverable or non-recoverable. A recoverable draw creates a balance that future approved commission reduces; a non-recoverable draw is treated as guaranteed compensation under the plan’s terms. The distinction must be explicit before a period begins.
A worked example
If a rep receives a $4,000 recoverable draw and earns $6,000 of approved commission, the statement can show $4,000 recovered and $2,000 remaining as payable commission. If earned commission is lower, the plan should explain how the balance carries forward.
Questions to settle
Document when the draw begins and ends, how role changes affect it, what happens at termination, and whether recovery is capped. Approved and pending earnings should never be mixed in the draw balance.
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