Commission split calculator

How a commission split is worked out

Every closing pays a gross commission: the sale price times the rate for that side of the deal. On a $400,000 sale at 2.5%, that is $10,000. The title or escrow company sends the whole check to the brokerage, not to the agent, and the brokerage pays the agent from it. What the agent takes home depends on the order the deductions come off, which is why two brokerages with the same 70/30 split can pay the same agent different amounts on the same sale.

This calculator takes them in the order most brokerage plans use:

1. Referral fee. A fee owed to another brokerage for sending the client comes off the gross commission first, usually 20 to 35 percent of it. It is the other brokerage's money, so neither side of the split pays it alone.
2. Brokerage split. The brokerage's percentage of what is left. On a 70/30 plan the brokerage takes 30 percent and the agent keeps 70.
3. Cap. A cap is the most the brokerage collects from one agent's splits in a cap year, often the twelve months from their start date. Once the brokerage has taken that much, the agent keeps 100 percent of the split for the rest of the year. A closing can cross the cap partway, and then the brokerage takes only what was left.
4. Team fee. On a team, the team lead takes a share of the agent's side after the brokerage split. Team agreements differ; if yours takes the team's share before the brokerage split, work the team step out first and enter the rest.
5. Transaction fee. A flat amount per closing, charged to the agent and kept by the brokerage. Most plans charge it before and after cap, and most do not count it toward the cap.

A worked example

Take a $400,000 sale at 2.5%, a 25% referral fee, a 70/30 split, $1,500 left on the agent's cap and a $295 transaction fee. These are example figures, not anybody's real closing.

The three lines that leave the check, $2,500 to the referring brokerage, $1,795 to the brokerage and $5,705 to the agent, add back up to the $10,000 that came in. That is the first thing to check on any commission statement. The agent has now capped, so on their next closing this year the brokerage takes no split at all, only the $295 fee.

Company dollar: what the brokerage actually keeps

The brokerage's side of a closing, its split plus any fees, is often called the company dollar. It is the number the office pays rent, staff and errors-and-omissions cover from, and it moves a great deal through the year: high on an agent's first closings, then down to fees only once they cap. A broker-owner planning the year should count the caps still open, not just the closings expected.

Where split math goes wrong in a spreadsheet

Most small and mid-sized brokerages run this in a workbook, a tab per year with a row per closing. It works until a split changes partway through a year and last year's formulas change with it, until two people edit the cap column on the same afternoon, or until an agent asks how close they are to cap and somebody has to add it up by hand. A calculator answers one closing. Keeping every agent's plan, cap year and statements straight across hundreds of closings is the back office's job.

From one closing to the whole office

Deskwork is a back office for real-estate brokerages. It keeps each agent's commission plan, whether a split with or without a cap, a fee-only plan or tiers, and works out every closing on the file from contract to commission. Each agent gets a statement with the split, the fees and their cap on it, and can see how far they are toward cap without asking. It works with the Google Workspace your office already uses, and your documents stay in your own Google Drive.