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Commission Based Employment Contract Template for Canada

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Key Requirements PROMPT example:

Commission Based Employment Contract

"I need a Commission Based Employment Contract for hiring a software sales representative in Ontario, Canada, starting March 1, 2025, with a 70/30 base-to-commission split and standard non-compete provisions."

What is a Commission Based Employment Contract?

This Commission Based Employment Contract is designed for use in Canadian business environments where employees are compensated primarily or partially through sales commissions. It is particularly relevant for organizations engaging sales professionals, real estate agents, insurance brokers, and similar roles where performance-based compensation is standard practice. The document ensures compliance with Canadian federal and provincial employment standards, tax regulations, and labor laws while providing a clear framework for commission calculations, payment terms, and performance expectations. It includes essential protections for both employer and employee, addressing critical aspects such as territory rights, customer relationships, and intellectual property. This agreement is typically used when hiring new sales staff or converting existing employees to a commission-based structure, and can be customized based on provincial requirements and industry-specific needs.

What sections should be included in a Commission Based Employment Contract?

1. Parties: Identification of the employer and employee, including full legal names and addresses

2. Background: Context of the employment relationship and purpose of the agreement

3. Definitions: Key terms used throughout the agreement, including commission-specific terminology

4. Appointment and Term: Position title, employment status, and duration of employment

5. Duties and Responsibilities: Primary job responsibilities, reporting structure, and performance expectations

6. Commission Structure: Details of commission calculations, rates, and payment terms

7. Base Salary and Benefits: Any guaranteed base compensation and standard benefits package details

8. Payment Terms: Timing and method of commission payments, including any holdbacks or adjustments

9. Targets and Quotas: Sales or performance targets that affect commission earnings

10. Hours of Work: Expected working hours, flexibility, and overtime provisions

11. Confidentiality: Protection of company confidential information

12. Non-Solicitation: Restrictions on soliciting customers or employees

13. Termination: Conditions and process for ending the employment relationship

14. Governing Law: Applicable jurisdiction and legal framework

What sections are optional to include in a Commission Based Employment Contract?

1. Probationary Period: Terms of initial probation period - include if applicable to the role

2. Training and Development: Professional development requirements and support - include for roles requiring specific certifications

3. Expense Reimbursement: Terms for business expense claims - include for roles involving travel or client entertainment

4. Non-Competition: Restrictions on working for competitors - include for senior roles or those with access to sensitive information

5. Remote Work: Terms for working from home or remote locations - include if remote work is permitted

6. Territory Assignment: Geographic or account territory definitions - include for field sales roles

7. Intellectual Property: Ownership of work product - include for roles involving creative or technical development

8. Company Vehicle: Terms for use of company vehicles - include if a vehicle is provided

9. Draw Against Commission: Terms for salary advances against future commissions - include if draw system is used

What schedules should be included in a Commission Based Employment Contract?

1. Schedule A - Commission Rates: Detailed breakdown of commission rates, tiers, and calculation methods

2. Schedule B - Sales Targets: Specific performance targets and quotas for commission eligibility

3. Schedule C - Benefits Package: Details of health benefits, insurance, and other perks

4. Schedule D - Territory Map: Geographic territory or account assignments if applicable

5. Schedule E - Bonus Structure: Additional incentive or bonus programs beyond standard commission

6. Appendix 1 - Commission Calculator: Examples of commission calculations for different scenarios

7. Appendix 2 - Expense Policy: Detailed policies for business expense reimbursement

8. Appendix 3 - Sales Process: Required sales procedures and documentation requirements

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 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

Retail

Real Estate

Insurance

Financial Services

Technology

Telecommunications

Automotive

Manufacturing

Pharmaceuticals

Marketing and Advertising

Professional Services

Medical Devices

Consumer Goods

Industrial Equipment

Software and SaaS

Relevant Teams

Sales

Business Development

Account Management

Commercial

Revenue

Channel Partners

Field Sales

Inside Sales

Enterprise Sales

Retail Operations

Direct Sales

Solution Sales

Regional Sales

Customer Success

Sales Operations

Relevant Roles

Sales Representative

Account Executive

Business Development Manager

Real Estate Agent

Insurance Broker

Sales Consultant

Territory Manager

Commercial Sales Agent

Recruitment Consultant

Pharmaceutical Sales Representative

Financial Advisor

Marketing Consultant

Software Sales Executive

Sales Engineer

Channel Partner Manager

Commission-Based Trainer

Retail Sales Associate

Medical Device Sales Representative

Advertising Sales Executive

Investment Advisor

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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