Commission is a way of earning money. Most commonly, members of sales teams in companies are often paid in commission. The way it works is you are given a percent commission that you will make, then when you make a sale your pay is that percentage of the total sale or profit of that sale, depending on your employer's agreement.
This exists in many different industries. Some include real estate, when a house is sold the real estate agent makes commission on that sale, car sales, when you buy a car they get a percent, and many more.
Commission is paid out depending on your employer. Commonly, it is paid out on a monthly basis.
Commission is not necessarily better than salary, but it often will allow those who are driven to work harder and make more since there is no earning cap, typically. The largest downside can be that your pay will be very little if you are not making many sales, making it harder to make ends meet.
The IRS treats commission as supplemental income, making it not regular income. They typically tax higher on other forms of income like this.
For the USA, commission must be taxed.
Create Date: September 12, 2024
Last Modified Date: September 12, 2024
