How to use the commission draw balance calculator
- Enter the draw per pay period and choose Recoverable or Non-recoverable.
- For a recoverable draw, enter any balance owed from earlier periods.
- List the commission earned in each period, adding rows as needed.
- Read the table of draws, commission paid on top, total paid and the balance owed after each period.
Formula
Recoverable: new balance = old balance + draw - commission
If the new balance is negative, pay the leftover commission on top and reset the balance to 0
Non-recoverable: pay on top = commission - draw when commission is larger, otherwise 0
Total paid in a period = draw + pay on top
With a recoverable draw the advance is a loan against future commission. With a non-recoverable draw it is a minimum that you keep even when commission falls short.
A $2,000 draw over four periods
With a $2,000 recoverable draw and commissions of $1,500, $2,500, $3,000 and $1,000, the balance owed is $500 after period 1, $0 after period 2, $0 after period 3 (with $1,000 paid on top) and $1,000 after period 4. You are paid $9,000 against $8,000 of commission, which is the $1,000 owed at the end.
With a non-recoverable draw of the same size the pay is $2,000, $2,500, $3,000 and $2,000, a total of $9,500, and the $1,500 of shortfall in periods 1 and 4 does not have to be repaid. A $1,000 draw that starts with $300 already owed and earns $200 then $800 has $1,100 owed after period 1 and $1,300 after period 2.
Recoverable or not
A recoverable draw is an advance, so a slow month leaves a balance that later commission has to cover before you are paid more. A non-recoverable draw is closer to a guaranteed minimum, and the company absorbs the shortfall. The plan document decides which one applies, and it may also set limits on how long a balance can carry or what happens if you leave.
For the commission itself see the sales commission calculator and the commission calculator. Pay for a period in total is in the gross pay calculator, and the effect of hours on pay in the true hourly wage calculator.
Reading the balance
A rising balance means you are being paid more than you have earned so far. That is not a problem in itself under a recoverable plan, but it is worth watching, because it is the amount that could be asked back. A balance of zero with extra commission paid on top means the draw has been fully earned.
Assumptions and limits
- The draw is paid in full every period, and commission is the amount earned in that period.
- A recoverable balance carries forward with no limit and no interest.
- Taxes and withholding are not included. All amounts are before taxes.
- The page models two common plan types and does not know the terms of your own plan. It is not legal or tax advice.
Frequently asked questions
What is a draw against commission?
It is a regular payment advanced before commission is known. A recoverable draw is repaid from later commission, and a non-recoverable draw is not.
How is a recoverable draw balance calculated?
Add each draw to the balance and subtract the commission earned. If the balance goes below zero, the extra is paid to you and the balance resets to zero.
What happens to the balance if I leave?
That depends on your agreement. Some plans forgive a balance and some require repayment, so check the document. The page only tracks the numbers.
Is a draw the same as a salary?
Not exactly. A salary is pay for time, while a draw is an advance on commission, and a recoverable one can leave you owing money.