Lesson 1: Income - Commission

   Constructing Knowledge


Some industries use commission as the entire method of pay or as part of a system of payment. Employers can use a combination of hourly pay and commission to pay their employees. They can also use a combination of salary and commission. The term "straight commission" refers to payment by commission only.

Commission
a sum of money paid after a task is complete. Payment is based on a percentage of every completed sale.

Real estate agents, agents for athletes, and salespeople can all be paid by varying forms of commission.



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Advantages of Commission

  • Workers are financially rewarded for selling more goods.
  • There is often more flexibility with hours of work.

Disadvantages of Commission

  • Income is dependent upon sales. If you don't sell anything, you don't earn much, if anything at all.
  • Income is not a consistent amount.
  • If the product being sold is of poor quality, making sales can be difficult.


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