Institute of Certified Bookkeepers
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April 2015 Question of the Month - Real Estate Agent Extra Payments

  • 123 posts
  • # 107448

My client has employees in a real estate business. They are paid base wages and commission. Sometimes they also receive an extra payment for sales made in a certain timeframe.  These extra payments can be from both the client’s bank account OR from the customer directly.  How do I treat these extra payments?

  • 123 posts
  • # 108796

ICB's Response:

This would be classified as an incentive payment. When the payment is made directly to the salesperson by the vendor, then the employee would need to declare it as income on their tax return, but the real estate agent would not need to get involved. It would be seen as a separate arrangement and not part of their wage or salary.

However, if the payment has been made via the real estate agent, it is classified as relating to work having been done in ordinary hours; therefore you would put it through payroll and classify it as an incentive payment or bonus. It is liable for super and PAYG tax must be withheld before passing on final payment to the employee.

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