Real Estate Agent Commission on Termination Australia 2026: What You're Owed

If you've exchanged contracts on a sale before your last day, the commission is earned — even if the sale doesn't settle until weeks later. Your employer must pay it out, usually within 7 days of termination, unless your written contract validly defers payment to settlement. Commission clawback clauses (where the employer reduces or removes commission post-resignation) are only enforceable if they're clear, in writing, and reasonable — they cannot strip you of commission already crystallised under the Real Estate Industry Award 2020 (MA000106) base entitlements.

This is the central legal question, and it depends on what your contract says. There are three common triggers used in real estate employment contracts:

• Exchange of contracts — most common. Once the buyer and seller have signed and the cooling-off period passes, commission is treated as earned. This is the trigger most courts apply by default if your contract is silent.
• Settlement — some agencies write contracts that defer commission until the property settles (typically 30-90 days after exchange). This delay can work in the agency's favour if you leave — but only if the contract clearly says so.
• Unconditional contract — middle ground used in some agencies. Commission is earned once finance and inspection conditions are removed, before settlement.

Check your employment contract for the exact wording. If it says "commission is payable on settlement" with no carve-out for terminated employees, you may have a wait — but the commission is still yours.

Regardless of what your individual employment contract says, the Real Estate Industry Award 2020 (MA000106) sets minimum entitlements every employee gets. These cannot be contracted out of:

• Base hourly rate (minimum $24.95/hr for Level 1, more for licensed agents and property managers).
• Penalty rates for weekend work (Saturday 1.25x, Sunday 1.5x — relevant for weekend open homes).
• Annual leave accrual (4 weeks per year).
• Personal/carer's leave.
• Notice of termination under the Fair Work Act.

Commission is paid on top of these base entitlements. A "commission-only" arrangement is not lawful under MA000106 — your employer must guarantee at least the base hourly rate for the hours you worked. If they didn't, you may have an underpayment claim regardless of how the commission was structured. Use our Back-Pay Calculator to estimate the gap.

A clawback clause is a contract term that reduces or removes your commission entitlement if certain things happen — typically:

• You resign before the sale settles.
• The sale falls through after exchange (buyer pulls out, finance fails).
• The property is re-listed and sold by a different agent within a set window.

Clawback clauses are enforceable only if:

1. The clause is clearly written and not ambiguous;
2. You signed and were given a copy before commencing employment (not added later);
3. The reduction is proportionate to the actual loss the agency suffers (a clause that strips you of 100% of earned commission for resigning a week before settlement is likely to be challenged as a penalty, which is unenforceable at common law);
4. The clause doesn't reduce your pay below the Award minimum for the hours you actually worked.

If your contract says "all commission forfeited on resignation" with no carve-out, this is unusually one-sided and is more likely to be unenforceable than enforced. The Fair Work Commission and state courts have struck down absolute forfeiture clauses in similar industries.

You're a Level 4 sales agent. On 15 May, you exchanged contracts on a $900,000 sale with a settlement date of 15 July. The agency's commission split entitles you to 40% of the agency's 2.5% commission ($9,000 to you). Your employment contract says commission is "payable on settlement."

On 1 June, you resign with 2 weeks' notice (last day 15 June). The sale is on track to settle on 15 July.

• Base entitlements — paid out on your last pay run (15 June). Includes accrued annual leave, any owed pay, and notice/in-lieu if applicable.
• Earned commission ($9,000) — the contract defers it to settlement. If your contract has no clawback clause, the employer must still pay the $9,000 on or around 15 July when settlement occurs. They cannot keep it just because you've left.
• If the contract has a clawback clause — depends on wording. A "must be employed at settlement" clause may be enforceable. A "must be employed when payable" clause is more ambiguous and often interpreted against the employer (contra proferentem).

If the employer refuses to pay on 15 July, you have grounds to lodge an underpayment claim with the Fair Work Ombudsman or pursue it through the Federal Circuit Court.

Even with a "payable on settlement" clause and no clawback, an extended delay between exchange and settlement (e.g. off-the-plan sales, 12+ months) doesn't extinguish your right to the commission. The commission has been earned — it's just been deferred. Your former employer has an obligation to pay it once settlement occurs.

The practical issue is enforcement. After 6-12 months of separation, agencies sometimes "lose" paperwork or argue the contract has lapsed. To protect yourself before leaving:

1. Request a written confirmation listing every pending sale and your commission entitlement on each, by sale + amount + expected settlement date.
2. Get this signed by a director or owner, not just your manager.
3. Keep your own copies of all listing agreements and sale contracts where your name appears as the listing/selling agent.
4. Diarise expected settlement dates and follow up in writing within 14 days of each.

This single step — getting a written list of pending entitlements before your last day — resolves about 80% of disputes before they start.

Step-by-step recovery process:

1. Send a written demand. Use our Underpayment Claim Builder or write a formal letter listing: sale address, exchange date, settlement date, commission amount per your contract, and a 14-day response deadline.
2. Lodge with the Fair Work Ombudsman. Call 13 13 94 or use the online Request for Assistance. The FWO investigates real estate commission underpayments at no cost to you.
3. Small Claims under the Fair Work Act. For amounts under $20,000, you can lodge in the Federal Circuit and Family Court under the Small Claims Procedure. Filing fees are low and you don't usually need a lawyer.
4. General Protections claim. If you suspect the non-payment is retaliation for raising a workplace right (e.g. asking about your award rates before resigning), you have 21 days from the adverse action to lodge with the Fair Work Commission. See our General Protections guide.
5. State debt recovery. For amounts over $20,000, NSW, VIC, and QLD all have civil procedures for unpaid wages and commissions. A solicitor can help you weigh costs vs likely recovery.

Most disputes settle once a formal demand is sent. The hardest cases are where the sale falls through after exchange and the agency argues the commission was contingent — those need the contract language reviewed carefully.

Many real estate contracts include a restraint of trade clause: a period after termination (3-12 months is common) during which you cannot solicit former clients or work for a competing agency within a set distance.

These clauses are enforceable in Australia only to the extent reasonably necessary to protect the employer's legitimate business interests. A blanket 12-month restraint on working for any agency within 50km is often struck down by courts as too broad. A 3-month restraint on actively soliciting specific clients you worked with is much more likely to hold.

If your former employer threatens action over restraint of trade while also withholding earned commission, get advice — you may have leverage to negotiate a release from restraint in exchange for accepting the unpaid commission.

• Don't sign anything new on your last day. Some agencies present a "termination agreement" or "deed of release" that waives your right to outstanding commissions. You don't have to sign it — and you usually shouldn't until you have legal advice.
• Don't accept verbal promises. "Don't worry, we'll sort the commission out" is worth nothing in court. Get it in writing.
• Don't accept a reduced commission as "goodwill" without checking what you're actually owed. Agencies sometimes offer 50% of earned commission as a "fair compromise" when 100% is what you're entitled to.
• Don't wait too long. Underpayment claims under the Fair Work Act have a 6-year limitation period. After that, recovery becomes much harder.