The four structures
Flat split
The agent keeps a fixed percentage of every commission, all year. Simple to explain, simple to calculate, easy to compare against another brokerage's offer.
The weakness is that it treats a first-year agent and a top producer identically, which makes it hard to retain the latter.
Tiered
The split improves as the agent crosses volume thresholds, and typically resets each year. Rewards production without giving away the whole margin.
The complexity is the reset: mid-year joiners, parental leave, and the question of whether a tier applies retroactively to earlier deals or only from the threshold forward. Both are defensible. Only one can be written down.
Graduated to 100%
The agent moves toward keeping the full commission once they have contributed a set amount to the brokerage, after which they typically pay a per-deal or monthly fee.
Attractive to established producers, and a strong recruiting story. It requires you to be genuinely comfortable with what the brokerage earns from a high producer late in their year.
Flat fee / fee-for-service
The agent keeps the commission and pays the brokerage a fixed amount per deal or per month. The brokerage is explicitly a service provider.
Clean, and increasingly common with experienced agents who want infrastructure rather than supervision-heavy support. It also puts real pressure on you to demonstrate the service is worth the fee.
What actually causes disputes
Not the headline percentage. Agents understand percentages. The arguments come from:
Clawbacks. A deal funds, the agent is paid, the mortgage is discharged inside the penalty window, and the lender claws back. Who absorbs it, over what period, and what happens if the agent has since left — these need answering before it happens, not after.
Overrides. A team lead earns a share of their team's production. Is the override calculated on gross or on the agent's net? Does it survive the agent leaving the team mid-deal?
Timing. Paid on funding, or on the brokerage receiving the lender's cheque? These are weeks apart, and the difference matters enormously to someone managing their own cash flow.
Referrals. A deal originated by one agent and closed by another. A split of a split — and the most common place a plan silently fails to specify anything at all.
Nearly every commission dispute traces back to a scenario the plan never addressed, rather than to a plan the agent disagreed with.
The operational requirement
Whatever structure you pick, one property matters more than the design: the arithmetic has to be reproducible.
When an agent questions a statement from four months ago, you should be able to show the inputs, the rule that applied at that time, and the result — without rebuilding it in a spreadsheet. That means:
- Plan versions are dated, and a deal is calculated against the version in force when it funded
- Every adjustment, clawback and override is itemised rather than netted into a single figure
- The statement the agent sees is generated from the same data the payment came from
A plan that cannot be reproduced is one where the answer to every dispute is "trust me". That works until it doesn't, and it makes departing agents unnecessarily expensive.
Mortgage360 handles this in the commissions module — versioned plans, itemised adjustments, and statements generated from the same ledger that pays. But the requirement is structural, not vendor-specific: if your plan can't be replayed, it will eventually cost you an agent.