Real Estate Commission Splits Explained: Maximize Your Earnings

Understanding commission splits is crucial for maximizing your earnings as a real estate agent. Here's everything you need to know about how they work.

What is a Commission Split?

A commission split is the percentage of commission income you keep versus what goes to your brokerage. For example, a 70/30 split means you keep 70% and the brokerage gets 30%.

Types of Commission Structures

1. Graduated Splits

Your split improves as you close more transactions or reach higher gross commission income (GCI).

Example:

First $50K GCI: 60/40 split
Next $50K GCI: 70/30 split
Above $100K GCI: 80/20 split

2. Flat Rate Splits

Same percentage regardless of production level. Common with cloud brokerages offering 85-95% splits.

3. Cap Systems

You pay a maximum amount to the brokerage annually, then keep 100% of subsequent commissions.

Example:

85/15 split with $12,000 annual cap. Once you've paid $12,000 to the brokerage, you keep 100% for the rest of the year.

Hidden Costs to Consider

Transaction Fees

Many brokerages charge $25-$500 per transaction on top of the commission split.

Monthly Desk Fees

Fixed monthly costs ranging from $50-$1,000+ regardless of production.

Technology and Marketing Fees

Additional charges for CRM, marketing platforms, and other tools.

Calculating Your True Take-Home

To understand your real earnings potential:

Calculate commission after split
Subtract transaction fees
Subtract annual desk fees
Add any revenue share income
Consider stock awards or other benefits

Quick Calculation Example

$100,000 GCI at 70/30 split with $300/month desk fees:

Commission after split: $70,000
Annual desk fees: $3,600
Net income: $66,400

Compare Your Options

Use the BrokerageCompass calculator to compare how different commission structures would affect your take-home pay based on your production goals.