Apr 10, 2021 03:19 PM EDT By Eric Hamilton, UniversityHerald Reporter

Every job has its pros and cons. Even your dream job may have its drawbacks. Likewise, working for a commission can be both rewarding and challenging.

Many people associate a commission-based job with a sales position. However, various other careers also have this payment structure.

Let's first look at what 'commission' really means:

Definition of Commission

Commission is when someone gets paid a specific amount of money based on a goal they've achieved. These targets will vary based on the work you're doing, usually by reaching a certain amount of sales within a specific period.

If you're an agent in the literary market, you could be receiving a commission for every book you get published on behalf of your writer.

There's usually a predetermined rate between the employer and employee or client and agent before starting their contractual relationship.

You could receive a commission in addition to your primary salary, or you could be paid commission only.

Taxes on Commission

Commission is regarded as part of taxable income. Depending on your commission, your taxes could be higher than usual. However, certain expenses are deductible and referred to as 'sales expenses'. You'll find more information on taxpage.com

Advantages and Disadvantages of a Commission-Based Job

Advantages

• Flexibility

As a commission-only employee, depending on your contract, you've complete control over your schedule. You'll be able to arrange your time to suit your needs.

• Control over Income

With commission-based work, the harder you work, the more income you'll make. This might be appealing for those who are competitive and will thrive in this kind of job. This is, of course, also dependent on various other aspects, like the economy and the product or service you're selling or promoting.

• Benefits

In a position that's part commission, you could receive company benefits. This could include medical insurance, a mobile, a laptop, and sometimes even an entertainment allowance to wine and dine your clients.

Disadvantages

• Unpredictable

In a sales environment there can be lots of unpredictable situations. You're not always able to determine how a product will sell at a specific time. This can be a disadvantage as you might not be able to handle a surge in sales and remain patient, confident and providing the best customer service.

• Irregular Income

Just as the situations can be unpredictable, the income is also not steady. If you fall sick unexpectedly for an extended period, you'll miss out on your income. There are also fluctuations in the economy that can affect business, which could adversely impact opportunities to make money.

• Lose Focus

You could become so focused on making money that you may lose sight of other important things, like client satisfaction. Not taking care in explaining a product properly to a customer can discourage them from doing business with you or your company.

Examples of Commission-Only Jobs

• Retail Sales

A position that requires you to be responsible for selling a product in a retail environment. This includes answering the customers' questions about the product, suggesting certain items to them, assisting with inventory, taking payments, and keeping customers informed of any promotions.

• Real Estate Agent

Assisting clients with the purchase or sale of properties both residential and commercial. This includes advising them of market trends, taking them to view a property, and helping negotiate a suitable price.

Overtime for Commission Only Jobs

Some employers are required by specific regulations to pay commission-only employees overtime. These would be hours that exceed a 40 hour week unless they are otherwise exempted.

In Closing

There are many things to consider when pursuing a job with a commission. There are advantages like flexible hours and control over your time. At the same time there are disadvantages such as irregular income and unpredictability.

It's clear that this kind of job is best suited for specific people and perhaps not for others. Before you decide, it's always a good idea to chat to those working in this industry and get a first-hand account.

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