Definition of Draw Against Commission | Salary Plan

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Draw Against Commission Definition

Payroll Draw Definition

Draw against commission is a salary plan based completely on an employee’s earned commissions. An employee is advanced a set amount of money as a paycheck at the start of a pay period. At the end of the pay period or sales period, depending on the agreement, the draw is deducted from the employee’s commission.

Salary Draw Extended Definition

Draw against commission allows the employee to receive a regular paycheck based on their future commissions. The amount of the payroll draw and the pay period or sales period are pre-determined. The employee’s commission at the end of the agreed-upon period then goes toward paying back the draw. When the draw from that pay period is paid off, then usually the employee keeps their remaining commission. The draw against commission is a way of providing a steady income for the salesperson until scheduled commission checks are received.

Related Blog Article:
The Basics of the Draw Against Commission System
What is Commission?

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