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Commission Agreement

Flexible commission and incentive agreement template for Indian businesses to formalise performance-based payouts, covering commission triggers, chargebacks, timelines, tax, and performance conditions.

Takes 5 minutes ~2 pages Expert drafted
commission agreementsales incentiveperformance bonuschargebackvariable payIndian businesschannel incentives
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What is a Commission Agreement?

This is a configurable commission and incentive agreement template suitable for Indian companies to formalise variable payouts for employees, contractors, resellers, and referral partners, with clear triggers, caps, claw-backs, and tax treatment.

When should you use this?

Common situations where this document is the right choice.

When launching a new sales incentive or commission plan for staff or channel partners.
When documenting referral or reseller commission arrangements that were previously informal.
When you need clear chargeback and claw-back provisions for cancellations and bad debts.
When you want a standalone commission agreement that can sit alongside an employment or services contract.

What's included

Key sections and clauses in this document.

Choice of fixed, percentage, tiered, or hybrid commission models.
Configurable commission trigger (contract, invoice, payment, or go-live).
Settlement frequency, payment timelines, and optional commission caps.
Minimum performance thresholds and eligibility rules.
Detailed refund, chargeback, and bad debt adjustment provisions.
Tax treatment notes covering TDS, GST, and other statutory deductions.
Termination and impact on accrued or future commissions.
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Frequently asked questions

Everything you need to know before creating your document.

Should this agreement be separate from the employment or services contract?+

In many cases it is helpful to keep the commission plan in a separate, easily updatable document that is referenced in the main employment or services contract, so that commercial tweaks do not require reissuing core contracts.

How detailed should the chargeback and refund rules be?+

They should be specific enough to address typical scenarios such as cancellations within a look-back window, partial refunds, bad debts after a certain age, and how set-off will operate, to minimise disputes.

Can the company unilaterally change the commission plan mid-term?+

Under Indian contract principles, unilateral changes are sensitive. The agreement can allow changes with prior notice, but material changes should ideally involve acknowledgement or acceptance, especially for employees or long-term partners.

Does commission always need to be linked to revenue?+

Not necessarily. Commission can be linked to transaction count, margin, collection efficiency, or other objective KPIs, but revenue-based triggers are most common because they align parties economically.

How should withholding tax and GST be handled on commission?+

Employees usually face TDS under salary or professional income rules, while independent partners may charge GST on commission invoices and suffer TDS as applicable. The template provides a dedicated field to capture your agreed position with tax advisors.

Legally valid

Compliant with Indian law

Expert drafted

By certified legal professionals

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Word + PDF, edit anytime

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Commission Agreement

₹2,499₹1,199Launch Offer
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