Commission-only agents: What the industry needs to know

Commission-only agents are an important part of the real estate industry. While the use of commission-only agents offers flexibility and performance-based incentives, there are strict compliance requirements. For agencies and employees considering this employment structure, understanding the requirements and risks is essential.

Who can be a commission-only agent?

A commission-only agent is a real estate professional who is remunerated solely through commission, without receiving a base salary. This model can be attractive to high-performing agents, as it allows the agents to directly benefit from the transactions they close. For agencies, it reduces fixed employment costs and aligns remuneration with productivity.

An employee may be paid on a commission-only basis when an award, enterprise agreement or other registered agreement states that an employee may be remunerated this way.^[1] The Real Estate Industry Award 2020 (the Award) permits real estate sales employees to be paid on a commission-only basis providing the following conditions are satisfied:

• the employee is engaged in property sales or commercial, industrial or retail leasing as a Real Estate Employee Level 2 or higher, or has his or her own real estate business, for at least 12 consecutive months in the 3 years prior to entering into a commission-only agreement;
• the employee has been issued with a real estate agent’s license or is registered or permitted to perform the duties of a real estate salesperson ;
• the employee is at least 21 years of age;
• the employee is not engaged as a part-time employee, a casual, a junior, a Real Estate Employee Level 1 or a trainee;
• the employee has achieved the Minimum Income Threshold Amount (MITA) prescribed by clause 16.7(d) of the Award; and
• the employee and the employer have made a written agreement that the employee will be remunerated on a commission-only basis.^[2]

Failure to meet all of these requirements will render any commission-only arrangement non-compliant.

What is the Minimum Income Threshold Amount (MITA)?

The Minimum Income Threshold Amount (MITA) is a performance-based income benchmark that must be met before an employee can be engaged on a commission only basis.

An employee satisfies the MITA if they can demonstrate that, in any consecutive 12-month period within the previous three years, they earned at least 125% of the applicable minimum award rate calculated annually (excluding superannuation and allowances).^[3] As of 1 July 2025, the MITA increased to $69,634.^[4]

Annual review obligations

Commission-only arrangements are not “set and forget”. The Award requires that an agent’s gross income be reviewed annually to ensure ongoing satisfaction of the MITA._^[5] An employer must be satisfied on reasonable grounds that the MITA has been met. An employer may rely on documentation such as:

• pay slips;
• payment summaries; and
• commission statements or sales records.^[6]

Risk and compliance challenges

Where an agent needs to transition from a commission-only arrangement, this can have a significant financial impact on agencies, particularly where the agency is not structured to absorb additional fixed salary costs. This financial pressure can create a heightened compliance risk where agencies may be incentivised to terminate employment.

While an agent failing to meet the MITA can no longer lawfully remain on a commission-only arrangement, this does not automatically terminate their employment.

For the purposes of the Fair Work Act 2009 (Cth), commission-only agents remain employees. Accordingly, an agency must not terminate a commission-only agent on account of their failure to satisfy the Award requirements without following a procedurally fair process and providing a valid reason related to the employee’s capacity or conduct.^[7] In such circumstances, a failure to redeploy an agent to an alternative employment structure that complies with the Award, may render the dismissal harsh, unjust or unreasonable.

If an agent continues to be employed on a commission-only basis after failing an annual MITA review, serious consequences may flow for an employer, including:

• civil penalties under the Fair Work Act 2009 (Cth) for breach of the Award;^[8]
•  retrospective liability for underpayments including payment of minimum wages, superannuation and leave entitlements; or
• reputational damage and regulatory scrutiny by the Fair Work Ombudsman.

Conclusion

Commission-only employment is conditional, not permanent. Agencies must actively monitor their commission-only agents’ financial performance to ensure compliance with the Award requirements and be prepared to transition them to compliant remuneration structures, if required.

To mitigate the risks of non-compliance, agencies should prioritise:

• maintaining accurate and complete records of earnings;
• clearly documenting commission structures; and
• undertaking regular reviews to ensure ongoing compliance with the award.

Read more about agency practice: Real estate agents occupiers' liability and third-party entrants.

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