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Commission Based Employment Contract for Germany

Commission Based Employment Contract Template for Germany

This document is a comprehensive employment agreement governed by German law that establishes a commission-based compensation structure between an employer and employee. It outlines the terms and conditions of employment, including base salary (if applicable), commission calculations, performance metrics, payment schedules, and other employment benefits. The contract ensures compliance with German labor laws, including the German Civil Code (BGB), Commercial Code (HGB), and relevant employment regulations while providing clear guidelines for commission-based compensation and performance expectations.

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Commission Based Employment Contract

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What is a Commission Based Employment Contract?

The Commission Based Employment Contract is designed for use in the German market where employers wish to establish performance-based compensation structures for sales and business development roles. This document is essential for companies operating in Germany who want to implement commission-based compensation while ensuring compliance with German employment law, including the German Civil Code (BGB) and Commercial Code (HGB). The contract addresses crucial elements such as commission calculation methods, payment terms, performance metrics, and protection of both employer and employee interests. It's particularly relevant for sales-oriented positions where a significant portion of compensation is tied to performance and results. The agreement includes mandatory German employment law provisions while providing flexibility to structure commission schemes that align with business objectives and market practices.

What sections should be included in a Commission Based Employment Contract?

1. Parties: Identification of the employer and employee with full legal names and addresses

2. Background: Context of the employment relationship and purpose of the agreement

3. Definitions: Key terms used throughout the contract, particularly focusing on commission-related terminology

4. Position and Duties: Description of the employee's role, responsibilities, and reporting structure

5. Duration and Probationary Period: Term of employment and initial probationary period details

6. Remuneration Structure: Base salary (if any) and detailed commission structure including calculation methods

7. Commission Terms: Specific conditions for earning commission, payment timing, and clawback provisions

8. Working Hours: Standard working hours, flexibility requirements, and overtime provisions

9. Leave Entitlement: Annual leave, public holidays, and other types of leave

10. Confidentiality: Protection of company information and trade secrets

11. Data Protection: Compliance with GDPR and German data protection requirements

12. Termination: Notice periods and conditions for contract termination

13. Post-Termination Obligations: Commission payments after termination and final settlement

14. Governing Law: Confirmation of German law application and jurisdiction

What sections are optional to include in a Commission Based Employment Contract?

1. Non-Competition: Post-employment restrictions, used when protecting client relationships is crucial

2. Company Car: Terms for provision of company vehicle, if applicable

3. Additional Benefits: Details of any additional benefits package, if offered

4. Remote Working: Provisions for working from home or other locations, if permitted

5. Training Requirements: Mandatory training and professional development obligations

6. Expense Reimbursement: Process and eligibility for business expense claims

7. Bonus Schemes: Additional performance-based incentives beyond commission

8. International Travel: Terms for international work if role requires cross-border activities

What schedules should be included in a Commission Based Employment Contract?

1. Commission Structure: Detailed breakdown of commission rates, tiers, and calculation methods

2. Performance Metrics: Specific KPIs and targets that trigger commission payments

3. Territory Assignment: Definition of geographical or client territory if applicable

4. Product Portfolio: List of products/services for which commission is payable

5. Commission Payment Schedule: Timing and process for commission calculations and payments

6. Benefits Package Details: Comprehensive overview of all benefits and eligibility criteria

7. Company Policies: Reference to relevant company policies affecting commission-based employees

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Germany

Publisher

Ƶ

Document Type

Employment Contract

Cost

Free to use
Relevant legal definitions

















































Clauses











































Relevant Industries

Real Estate

Insurance

Financial Services

Retail

Automotive

Software and Technology

Telecommunications

Pharmaceutical Sales

Manufacturing

Professional Services

Media and Advertising

Consumer Goods

Relevant Teams

Sales

Business Development

Account Management

Commercial Operations

Revenue

Channel Sales

Direct Sales

Inside Sales

Field Sales

Human Resources

Legal

Finance

Relevant Roles

Sales Representative

Business Development Manager

Account Executive

Sales Manager

Real Estate Agent

Insurance Broker

Financial Advisor

Recruitment Consultant

Sales Director

Commercial Manager

Business Development Executive

Territory Sales Manager

Channel Sales Manager

Inside Sales Representative

Regional Sales Director

Industries










Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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