The Agency Sales Commission Plan: A Template Built for Retainers, Not One-Off Deals

A standard sales commission template has two fields that matter: deal value and payout. You enter $48,000, you multiply by 10%, the rep gets $4,800, and the spreadsheet is finished.

An agency retainer does not behave like that. It has a signing month, then twelve or twenty-four billing months. Scope grows in month five. Media spend three times the size of the fee starts flowing through the account in month two. The client churns in month four and the rep has already been paid. Two years later the account manager renews it and the rep who left last March is still on the commission ledger.

An agency sales commission plan for retainer-based work needs to commission the agency's fee and margin (not gross billings or pass-through media spend), pay a higher rate on the first month and a lower rate on a defined recurring term, earn commission at signature but pay it only after the client's invoice is collected, and include a clawback window and a renewal-ownership rule. The rest of this page walks through the six decisions in order, one full worked example with the arithmetic shown month by month, and a plan document structure you can copy — ungated, no email form.

That is why an agency sales commission plan needs a different shape. Four things break the off-the-shelf template:

1. Recurring revenue. One signature creates 12–24 payable months, not one payout.
2. Pass-through media spend. Money that touches the agency's bank account but was never agency revenue.
3. Project work billed on top of the retainer. Production, one-off builds, third-party costs — sold by the same rep, earned at a different margin.
4. Renewals owned by account management. The person who keeps the client is rarely the person who signed it.

This page is not a template library. It is a decision document. Six decisions in the order you have to make them, one complete worked plan for a fictional agency with the arithmetic shown month by month, and a plan document structure you can copy — ungated, no email form.

Every figure on this page is an illustrative example chosen to make the arithmetic clear. None of them is a benchmark or an industry average. We will not publish an "average agency commission rate" until we have our own data to source it from.

Compliance note: a commission plan is an employment document. Rules on wage deductions, clawbacks, recovery of overpayments and final pay differ by US state and by country. Federal rules on permissible deductions from wages are set out in US Department of Labor wage and hour guidance. Have an employment lawyer in your jurisdiction review your plan before you issue it. Nothing here is legal advice.

Why do generic sales commission templates break at an agency?

The specific failure is timing. A one-off deal has a closed-won date and a single payout event, so "when is commission earned" and "when is commission paid" collapse into the same question. A retainer separates them permanently. The rep earns something at signature, something again in month two, something again in month fourteen — and the agency has not yet collected any of it when the first payment runs.

The second failure is the base. Templates assume deal value equals revenue. At an agency running Meta Ads and Google Ads for clients, deal value can be five times revenue, because most of it is the client's money in transit to a platform. Pay a percentage of that and you can pay the rep more than the account earns. The media spend section below shows exactly how that happens.

The third failure is that templates have no concept of ownership changing hands. Off-the-shelf plans end at closed-won. An agency relationship starts there.

The six decisions that define an agency commission plan

Make these in order. Each one constrains the next.

1. What counts as commissionable revenue?

You have three realistic definitions of commissionable revenue, and the choice decides everything downstream.

The difference between gross profit and gross billings is not academic. A client on a $2,000/month retainer with $40,000/month of media spend produces $42,000 of billings and, at a 10% management fee, $6,000 of agency revenue. Ten percent of billings is $4,200. Ten percent of revenue is $600. Same client, same month, a seven-fold difference in cost — and in the first case you are paying out 70% of what the account earned.

Project work needs its own treatment. A $30,000 website build where $14,000 goes to a freelance dev team is not the same deal as a $30,000 retainer year. If you commission projects at the retainer rate on the invoice value, your reps will chase low-margin production work. Commission project revenue on gross profit, at a lower rate, or not at all.

Then write an exclusions list into the plan document by name: pass-through media spend, print and production costs, third-party licence and software resale, ad platform credits, sales tax and VAT, travel and expenses rebilled at cost, and any amount invoiced but later credited. If it is not on the list, expect a rep to argue for it.

Recommended default: commission the agency's fee and margin only. Exclude pass-through media spend and third-party costs by name in a written exclusions list, and commission project work on gross profit at a separate, lower rate.

2. First-month rate vs recurring rate: how should they differ?

Agencies that get this right use two rates, not one.

• A higher rate on the new business event — the first month's fee, or the first 90 days of a new retainer. This rewards the hunt and lands close to when the work happened.
• A lower rate on the ongoing months for a defined term. This gives the rep a reason to sell clients who stay.

The trade-off is behavioural. Front-load hard — say 50% of first month, 2% recurring — and you get hunting, fast cash for the rep, and a rep who is largely indifferent to whether the client survives to month six. Back-load — 15% of first month, 8% recurring for 12 months — and the rep starts screening for fit, because their income depends on the account still existing next quarter. Back-loading costs you more in year one cash flow, and it costs you goodwill with a new hire who needs money now. That is what a draw against commission is for: an advance against future earnings, recoverable from commission as it accrues, which carries a new rep through the ramp without you paying a permanently higher base. Write the draw terms and whether it is recoverable into the plan.

Then answer the term question explicitly, because it is the most expensive sentence in the document. Does recurring commission run 12 months, 24 months, or the life of the account?

• 12 months. Cheap, predictable, easy to model into on-target earnings (OTE). Weak retention incentive after the anniversary.
• 24 months. Strong alignment with retainer economics, since agency retainers often justify their acquisition cost in year two. Doubles your forward liability per deal.
• Life of account. Excellent recruiting story, dangerous ledger. Five years in, you are paying a rep — or a former rep — an annuity on an account they have not touched since the kick-off call.

Recommended default: a defined 12 or 24-month recurring term with an explicit renewal trigger, not life of account. If the client renews and the rep is still employed and still involved, a new term can start at the recurring rate — by written amendment, not by silence.

3. Flat, tiered or accelerator: which structure fits agency deal volume?

Flat is one rate on everything. Tiered commission pays a higher rate on revenue above a threshold. An accelerator pays a higher rate on everything once the threshold is cleared, retrospectively — much stronger motivation at the line, much more expensive when someone clears it by a dollar.

The agency-specific error is the attainment period. Most templates tier on monthly new business. An agency that closes two deals a month does not have a monthly distribution — it has a lumpy one. Two closes in March and zero in April means the rep hits tier three then falls to tier one, earning wildly different rates for identical work. It feels arbitrary because it is arbitrary.

Recommended default: set the attainment period to a quarter, or use rolling three-month attainment. Use two or three tiers, not five. At agency deal volumes, more tiers add spreadsheet work and no extra motivation.

4. When is commission earned vs when is it paid?

Three different things, and plans that conflate them cause the arguments.

• Earned — the rep has met the condition and has a claim. Usually signature of a countersigned agreement, which is why e-signature timestamps matter: they give you an unarguable earning date.
• Accrued — the earned amount sits on your books as a liability, visible to the rep, not yet in payroll.
• Paid — it goes into a payroll run.

The agency-specific rule: earn on signature, pay only after the client's first invoice clears. Agencies carry the receivable. If you pay commission on invoice date and the client pays on day 62, you have funded the rep's commission out of your own cash for two months on revenue you may still have to chase. On a media account where you have also fronted platform spend, that gap can get genuinely dangerous.

Recommended default: commission is earned on signature, accrues visibly to the rep, and is paid in the payroll run following the month the client's invoice is collected. Recurring commission follows the same rule each month: collected, then paid.

5. Clawbacks and the churn window: what needs specifying?

A clawback clause needs four things specified, or it will not survive its first use.

1. Trigger event. Client cancels, client fails to pay an invoice within X days, or contract voided. Write each one out.
2. Window length. How long after signature the trigger applies.
3. Recovery method. Deducted from future commission, or repaid by the employee. This is the clause most likely to run into local wage-deduction law — deducting from future commission is generally simpler than recovering paid wages, and both need review where you operate.
4. Pause handling. Agency clients pause far more often than they cancel outright. State what a pause does: recurring commission suspends for the paused months and resumes on restart, and a pause beyond a stated length counts as cancellation.

A worked starting point: full clawback of commission paid if the client cancels within 90 days of the retainer start date; no clawback after 90 days; recurring commission simply stops at cancellation in either case; recovery by offset against the next two commission payments. That is a starting point for a lawyer conversation, not a finished clause.

Recommended default: a 90-day full clawback window, recovered by offset against future commission rather than repayment, with paused accounts defined explicitly.

6. Who owns the renewal?

When the account handover happens and the account manager runs the relationship, there are three honest answers.

The third option is honest but expensive: you will get churn you paid full first-month commission for. The first option quietly turns your closers into account managers.

While you are here, define house accounts — inbound, owner-sourced or legacy clients that carry a reduced rate or none — and split deals, where two reps worked the same opportunity. The default that causes fewest arguments: splits are 50/50 unless agreed in writing before the deal closes, and the sales lead's written decision is final. Referrals from a house account to new work get the house rate, not the new-business rate.

Recommended default: account management takes the relationship at handover; the rep keeps a reduced recurring rate for the remainder of the defined term. House accounts and split rules are named in the plan, not decided after the fact.

Media spend: the clause most agency commission plans are missing

Follow the money on a media account. The client transfers $40,000 of budget. The agency pays Meta Ads and Google Ads $40,000. The agency earns a management fee — a percentage of spend, a flat monthly fee, or a margin on buying — plus whatever retainer covers strategy and creative. The $40,000 was never agency revenue. It sat in the agency's bank account for eleven days and left.

Here is what happens when a commission plan says "10% of account value":

The left column is not a rounding error. It is an account that cannot be delivered profitably, and the rep did nothing wrong — they sold what the plan told them to sell. Worse, the plan actively rewards spend inflation: the rep's income rises when the client spends more, whether or not the fee rises with it.

The plan language you want: commission is calculated on the agency's management fee, retainer fee and buying margin only. Pass-through media spend, platform costs and ad credits are excluded from commissionable revenue. If you do want to reward spend growth — and there are good reasons to — do it as a small separate percentage of the fee uplift when a spend increase raises the fee, never as a percentage of spend itself.

One practical prerequisite: you cannot pay commission on margin unless you can separate client money from agency money every single month. If budget, platform payments and fees all land in one bank feed and get untangled in a quarterly spreadsheet, your commission run will be wrong and your reps will know before you do. In Wieldy, media-buying money flow and reconciliation is a feature on the Pro plan.

A worked agency commission plan, start to finish

Illustrative example only. Every number below is invented to make the arithmetic legible, for a fictional agency. It is not a benchmark, a recommendation on pay levels, or a market rate, and it is not Wieldy data. If you reproduce it with real figures, the base salary and rates are yours to set.

The agency: 12 people, digital and paid media, two sales reps, average new retainer $4,000/month, some accounts carrying media spend.

The plan on one page

Scenario A: $4,000/month pure retainer, signed 1 March

Rep's quarterly attainment before this deal: $5,000 of new monthly fee, so Tier 1 applies.

Full 24-month cost of the deal if it survives: $800 + (23 × $240) = $6,320 on $96,000 of fees, or 6.6%.

Scenario B: $2,000/month retainer + $40,000/month media spend at 10% fee

Commissionable fee = $2,000 retainer + $4,000 management fee = $6,000/month. Spend excluded.

Note what the plan did in month 4. The rep earned more because the fee grew, not because the spend grew. Under a "10% of account value" plan, the same six months would have paid the rep $31,200 — more than five times the agency's total gross revenue on the account after platform costs.

Scenario C: $6,000/month retainer, churns in month 3

Signed 1 April. Cancellation notice received 20 June, 81 days after start — inside the 90-day window.

Recovery: $1,920 is deducted from the rep's next two commission payments, not invoiced back to them. If the cancellation had landed on day 95, the rep would have kept the $1,920 and recurring commission would simply have stopped.

Quarter total, so you can sanity-check the cost

Assume one rep closes Scenario A and Scenario B in the same quarter and carries $5,000/month of older retainers at 6%.

Run that against the gross profit the same accounts produced in the quarter. If commission is a number you cannot say out loud comfortably, the rates are wrong — not the plan structure. Our guide on agency profit margin is a decent sanity check on which margin you should be testing it against, and how to price agency retainers matters here too: a commission plan cannot rescue an underpriced retainer.

The plan document: clauses to include and copy

Write these sections, in this order, and have each rep sign it.

1. Scope and effective date. Who the plan covers, the period it applies to, and that it supersedes prior plans and verbal arrangements. Trap it prevents: a rep relying on last year's more generous terms.

2. Definitions. Commissionable revenue, the exclusions list by name, attainment period, retainer start date, collection, cancellation, pause. Trap: every dispute you will ever have starts with an undefined word.

3. Rates and tiers. First-month rate, recurring rate, recurring term, tier thresholds and what resets when. Trap: tiers that are described but not bounded.

4. Calculation method. A worked example inside the document, with numbers. Trap: two arithmetically defensible readings of the same sentence.

5. Timing of earning and payment. Earned on countersigned agreement; accrued and visible; paid after collection, in the stated payroll run. Trap: the rep believing earned means payable now.

6. Clawback and recovery. Trigger, window, recovery method, pause treatment. Trap: an unenforceable deduction, or a clawback attempted with no clause at all.

7. Split deals and house accounts. How splits are decided and by whom, what a house account is, the rate on house-account expansion. Trap: two reps claiming the same inbound referral, with no tiebreaker.

8. Draw terms, if any. Amount, duration, whether recoverable, what happens to an unrecovered draw on leaving. Trap: an advance nobody agreed was recoverable.

9. Leaver terms. Whether recurring commission continues after the last working day, for how long, and whether it differs for resignation versus termination. Trap: without this clause, a departing rep's recurring commission liability can run for years on accounts they no longer touch — and you will be arguing about it while they are already at a competitor.

10. Right to amend and notice period. That the plan can change prospectively with written notice of a stated length, and that deals already closed are honoured on the terms in force at signature. Trap: a mid-year change applied retroactively, which is the fastest way to lose a good closer.

Use the ten sections above as your own plan template — there is no separate downloadable document or spreadsheet to link to here, but every calculation on this page can be rebuilt in a spreadsheet from the tables shown, or run live in Wieldy's tiered sales commission calculator, which is free and ungated.

Compliance. Commission plans are employment documents. Rules on wage deductions, clawbacks, recovery of overpayments, commission after termination and final pay vary by US state and by country — some states restrict deductions from wages sharply, and some treat earned commission as protected wages. Have a local employment lawyer review your plan before you issue it. This page is not legal advice.

Common ways agency commission plans go wrong

• Paying on gross billings including media spend. Fix: exclude pass-through spend by name; commission the fee and margin.
• Paying before the client pays. Fix: earn on signature, pay after collection.
• No clawback window. Fix: a defined trigger, window and recovery method — reviewed locally.
• Tiers that reset monthly. Fix: quarterly or rolling three-month attainment, so two closes in one month do not distort a rate.
• No definition of a split deal. Fix: 50/50 unless agreed in writing before close; sales lead decides.
• Recurring commission with no end date and no leaver clause. Fix: a defined 12 or 24-month term, plus written leaver terms.
• Commissioning project work at the retainer rate. Fix: a separate, lower rate on gross profit.
• Plan changed mid-year with no written notice. Fix: a notice clause, and closed deals honoured on the terms in force at signature.
• No single source of truth for what each rep is owed. Fix: one record, visible to the rep.

That last one is the one owners misdiagnose. When your spreadsheet and the rep's spreadsheet disagree by $340, nobody's plan design is at fault. It is a reconciliation problem — and it costs you trust faster than a stingy rate does.

Running the plan once it's written

Writing the plan is the easy half. Calculating it every month is where it falls over: recurring months ticking along on thirty accounts, tier true-ups at quarter end, clawbacks triggered by a cancellation someone forgot to tell finance about, media fees that must be separated from spend before anything can be multiplied. In a spreadsheet, that is a monthly job that grows with the client list and breaks when the person who built it is on holiday.

Good operational handling looks like this: commission is calculated from the same record as the invoice, so collection status drives payment automatically. The rep sees their accrued and paid commission in real time, which ends the two-spreadsheets argument. Clawbacks apply themselves when a client is marked cancelled inside the window. Payroll is fed from the same numbers finance already signed off.

Factually, that is what Wieldy is built to do. Tiered sales commissions are included on the Growth plan — launch price $59/month flat for 6 seats (regular price $99), a workspace price, not per user, with no per-client fees — alongside payroll and HR records, invoicing with online card payments, e-signatures, and the sales CRM and lead pipeline the deals come through in the first place. Media-buying money flow and reconciliation, the piece you need to commission on margin rather than spend, sits on Pro at its launch price of $105/month for 15 seats (regular $175). Wieldy is built by Zerak, the marketing agency run by Wieldy's founder Ed Kamel, and began as Zerak's internal system, which is why commissions, retainers and media-buying reconciliation are core features here rather than add-ons bolted onto a task manager.

If you want to see it against sample agency data, there is a live demo that opens from the Wieldy homepage — just enter an email, no account needed — and a 7-day free trial with no credit card on every plan (14 days if you sign up through a partner link).

Frequently asked questions

What is a typical sales commission rate for a marketing agency?

There is no reliable published figure, and any single percentage would be misleading because the base differs so much — 10% of gross billings and 10% of gross profit are completely different costs. Decide the base first, then set a rate you can afford against gross profit. The illustrative plan above uses 20% of first month and 6% recurring.

Should agency sales reps earn commission on recurring retainer revenue or only the first month?

Both, at two different rates. A higher first-month rate rewards the close; a lower recurring rate for a defined term gives the rep a reason to sell clients who stay. First-month only produces hunting with no regard for fit. Recurring only starves a new rep during ramp-up, which is what a draw is for.

Do you pay commission on media spend or only on the agency's management fee?

Only on the management fee, retainer fee and buying margin. Pass-through media spend is the client's money in transit to Meta Ads or Google Ads, not agency revenue. On a $2,000 retainer with $40,000 spend at a 10% fee, commissioning "account value" pays $4,200 against $6,000 of agency revenue. Exclude spend by name in the plan.

How long should recurring retainer commission keep paying — 12 months, 24 months, or the life of the client?

A defined 12 or 24-month term with a written renewal trigger. Life of account reads well in a job offer and becomes an annuity you are still paying years later on an account the rep never touches — especially after they leave. Twenty-four months aligns best with retainer economics if you can carry the liability.

When should commission be paid: at signature, at invoice, or after the client pays?

Earned at signature, paid after collection. Agencies carry the receivable, so paying on invoice date funds the rep's commission out of your cash for however long the client takes. Show the rep the accrued amount immediately so the delay is transparent rather than suspicious.

How does a commission clawback work if a client cancels after two months?

With a 90-day window, a month-two cancellation triggers full recovery of commission already paid, and recurring commission stops. Recover by offsetting future commission payments rather than asking for repayment of wages. State whether a pause counts as cancellation. Deduction rules vary by state and country — get the clause reviewed locally.

What happens to a rep's commission when the account moves to account management?

The cleanest rule is that account management takes the relationship and the rep keeps a reduced recurring rate for the rest of the defined term. Stopping commission at handover removes any retention incentive; letting sales keep the full rate turns closers into account managers and slows new business.

How do tiered commissions work for an agency that only closes a few deals a month?

Use quarterly or rolling three-month attainment instead of monthly, or the rate will swing violently on deal timing rather than performance. Two or three tiers is enough at agency volumes. Decide whether clearing a tier lifts rates retrospectively for the whole period — an accelerator — or only on revenue above the threshold.

What should be written into an agency sales commission plan document?

Ten sections: scope and effective date, definitions and exclusions, rates and tiers, calculation method with a worked example, timing of earning and payment, clawback and recovery, split deals and house accounts, draw terms, leaver terms, and the right to amend with a notice period. The leaver and amendment clauses are the two most often missing and the most expensive to omit.

Who gets the commission when two reps worked the same deal?

Whatever the plan says — which is why it must say something. The default that causes fewest arguments: 50/50 unless a different split is agreed in writing before the deal closes, with the sales lead's written decision final. Expansion on a house account pays the house rate, not the new-business rate.

Written by Ed Kamel, founder of Zerak and Wieldy. Wieldy began as the internal system of the marketing agency Ed runs, so sales commissions, retainers and media-buying reconciliation were built as core requirements rather than add-ons, from actually running them.

Published September 2026. Competitor prices referenced on this site are re-checked quarterly by the Wieldy team; next review December 2026.