How to track agent commission caps

What a cap counts, which year it belongs to, and how to record the closing that uses up the last of it.

A commission cap is the most the brokerage takes from an agent during one cap year. After the cap is met, the agent keeps the share the plan would have paid the brokerage, and on most plans still pays the per-file fee. The definition is the easy part. The work is knowing, on the morning of a closing, how much of the cap is left, and writing that number down so the next closing starts from the same figure.

What the cap counts

Read the plan before you track a dollar of it. On most plans the cap counts the brokerage's share of the split, often called company dollar, and it does not count a flat transaction fee. A referral fee is usually taken off the gross commission before the split, so it never becomes company dollar and does not move the cap. A team fee is usually taken from the agent's side after the split, so it does not move the cap either. If your plan counts something else, the record has to follow the plan, not the habit from the last office.

Some plans have no cap. A fee-only plan, where the agent keeps the commission and pays fees instead, has nothing to add toward a cap. A tiered plan changes the split as the agent's contribution climbs. That is a cap with more than one step. Write the steps in the same place as the cap amount. Otherwise the second closing of the year gets priced on the first step, and the statement will not match what the agent was told at the start.

Which year the cap runs on

The calendar year is the wrong year for most agents. An agent who joined in April, and whose cap year starts in April, is not halfway through a cap on June 30 just because the office's books run from January to December. Track the cap on the agent's own anniversary: the day the cap year opens, the day it ends, and the company dollar already paid inside that window.

When the year resets, the amount already paid goes back to zero for the new year only. A closing that was paid in the old year stays in the old year, even if someone opens it in January. Changing the plan later must not rewrite those closings. If a closing in March was paid on a 70/30 split, it is still 70/30 after the agent moves to another plan in September. The new plan applies to closings paid after the change.

The closing that crosses the cap

Take a closing where the plan would pay the brokerage $3,000 and $800 of the cap is left. The brokerage takes $800, not $3,000, and the agent keeps the $2,200 the cap stopped. The next closing in that cap year pays the brokerage no split, only the per-file fee if the plan still charges one after the cap. Write both numbers on the closing: what the split would have been, and what was actually taken. The difference is how you explain the statement six months later, when nobody remembers that this was the closing that capped.

An agent who came into the closing already capped is a different case. The brokerage's split is zero from the first dollar. Do not type the full cap amount again, as if the year had just started. Do not leave the cap blank either. In a spreadsheet a blank cell often means no cap at all, and the split gets charged in full on a closing that should have paid none.

Where the number lives

A column on each agent's tab can hold the cap already paid, if one person updates it on the day the closing is paid, and if nobody sorts the rows in a way that drops the total. That is a lot of conditions. The failure is usually quiet. A closing is entered twice. A referral is counted as company dollar. The anniversary is treated as January because the column header says year to date.

Keep four facts beside the agent, not only a running total. The cap amount. The day this cap year started. What has already counted in this cap year, before today's closing. Whether the per-file fee counts. From those four, what is left is arithmetic anyone can repeat. A total with no start date cannot be checked, and it cannot be handed to the next person who runs the office.

What the agent should be able to see

Agents ask how close they are to cap because the answer changes what they take home. They should see their own progress, what is left, and the day the next cap year opens, without waiting for someone to open a spreadsheet and read a cell aloud. They should not see the rest of the office's figures. Teammates may see one another's pay, unless the office has made that team's pay private.

What Deskwork keeps

Deskwork runs each agent's cap on that agent's anniversary year, not on January 1. On a closing, before it is paid, the cap year shows what the agent had already paid toward the cap, what this closing adds, and what is left. Paying the closing counts it once. The closing keeps the plan it was paid on, so a later edit to the plan does not move an earlier cap contribution. The agent sees their own cap, their pay this year, and their statements.

The free commission split calculator on this site will price one closing against a cap amount you type, including the closing that uses up the last of it. It does not remember the agent's year after you close the page. The dates on the file are a separate job. The transaction timeline calculator turns a contract date and a closing date into the inspection and financing dates to watch, still in the browser, with nothing stored.

A cap record is finished when a second person can recompute what is left from the plan, the anniversary, and the closings already paid, and get the same number the statement used.

Questions brokers ask

Does a transaction fee count toward the cap?

Usually not. Most plans count the brokerage's share of the split and still charge the per-file fee on every closing, before and after the cap. Read the plan. If yours counts the fee, include it in what has already been paid before you say what is left.

Does the cap year follow the calendar year?

Not unless the plan says so. Track the agent's own anniversary: the day the cap year opens, what has been paid since that day, and the day the next year opens. A closing paid in the old year stays in the old year.

What happens when a closing crosses the cap?

The brokerage takes only what is left of the cap. The agent keeps the rest of the split the plan would have paid the brokerage. Record both the uncapped split and the amount actually taken, so the statement can be explained later.

Try it on your own office

Set up a plan, file a deal and close it before you decide. A desk you set up yourself through the signup page is free. If we set up your desk with you, what your brokerage pays is set out in our written agreement with you. Read about pricing.