1. What is a Flat Commission?

A flat commission is a fixed payment amount paid to a salesperson or agent for completing a transaction, regardless of the sale price or other variables. This differs from percentage-based commission structures.

2. How Flat Commission Works in California

In California, flat commission arrangements must comply with state labor laws. The key features are:

• Fixed amount per transaction or completed action
• Not tied to hours worked or sales amount
• Must meet minimum wage requirements when averaged over pay periods
• Must be clearly agreed upon in writing

3. Legal Considerations

Important: California law requires that commission agreements be in writing and contain:

• The method for computing commissions
• The time when commissions are earned
• Details about commission payment timing

4. Using the Calculator

Instructions: Simply enter the flat rate amount in USD to calculate the commission. This tool helps verify commission amounts under flat-rate structures.

5. Frequently Asked Questions (FAQ)

Q1: Are flat commissions legal in California?
A: Yes, but they must comply with California labor laws and minimum wage requirements when averaged.

Q2: How is flat commission different from percentage commission?
A: Flat commission pays a fixed amount per sale, while percentage commission varies with the sale price.

Q3: Can flat commissions be combined with hourly pay?
A: Yes, hybrid compensation structures are permitted as long as they meet all wage requirements.

Q4: When must flat commissions be paid in California?
A: Commissions are considered wages and must be paid at least twice per month on designated paydays.

Q5: Are there industries that commonly use flat commissions?
A: Yes, including real estate (for rental agreements), certain retail environments, and service industries.