Commission fee

Published by: Marieke Hartkoorn posted on 12 March 2019 reading time

Commission fees; rights and obligations.

Sometimes an employee's salary consists of a fixed part and a variable part. The variable part then depends on his individual performance, for example how many beds or cars a salesman has sold. But what happens to the salary if the employee is (temporarily) not able to build up commission, because he is ill or on holiday. These questions are answered below.

Wages during incapacity for work

During incapacity for work, an employee is entitled by law for two years to 70% of the "salary fixed in proportion to the time worked". In principle, "salary fixed in time" means the salary that has been agreed on a fixed monthly basis. In case of occupational disability, this concept is extended and the commission must also be considered as a wage component on which sickness benefits must be paid. Therefore, the employee is entitled to 70% of the monthly salary including the commission that he could have earned during that time. In practice, this means that the average wage including commission over a representative period is taken into account and 70% is paid out of this.

What if the employment contract or collective bargaining agreement provides for payment of more than the statutory rate? For example, the first year 100% and the second year 70%. How this is dealt with will depend on how exactly the agreement is formulated and whether an exception applies to the variable part of the salary. It may be that the employer has excluded the variable part, in which case the question is whether that is legally allowed. In principle, here too the commission is part of the salary on which sickness benefits are paid, so if 100% has been agreed, this means 100% of the average salary including commission.

Wages during holidays

During holidays, the employee does not work and therefore, no commission can be accrued. The intention of the legislator was that an employee would take holiday so that he could rest and relax. It is contrary to the purpose of the European Directive for an employee to be in a more disadvantageous financial position during his holiday, because he cannot earn a commission. The salary during holidays must therefore be equal to the average salary that the employee earns when he can earn a commission. Again, to determine the average salary, the salary over a representative period must be considered.

Holiday allowance on commission

Holiday allowance must also be calculated on commission. Usually, this is done and it is visible on the pay slip that an amount of 8% of the gross salary including commission is accumulated each month, which is paid out in one go in the month of May or June. The law does set a limit; no more than triple the minimum monthly wage needs to be paid out.

The amount of the holiday allowance may be subject to different arrangements in the CAO or the employment contract, but these may not be more disadvantageous for the employee than his statutory entitlements.

If you have any questions about the salary, please feel free to call our office. We will be pleased to speak with you and try to answer your question immediately.