Employee Commission Agreement

Employee Commission Agreement Template for Denmark

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Document background

The Employee Commission Agreement serves as a crucial supplement to the main employment contract in situations where employees receive commission-based compensation as part of their remuneration package. This document is essential for businesses operating in Denmark that want to implement or formalize commission structures while ensuring compliance with Danish employment law. It provides detailed frameworks for commission calculations, payment terms, and performance metrics, while addressing specific requirements under Danish legislation regarding variable pay, holiday entitlements, and employee rights. The agreement is particularly relevant for sales-driven organizations but can be adapted for any role where commission-based incentives are appropriate. It should be regularly reviewed and updated to reflect changes in business conditions and ensure continued compliance with Danish employment regulations.

Suggested Sections

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

2. Background: Brief context of the employment relationship and purpose of the commission agreement

3. Definitions: Key terms used in the agreement including 'Commission', 'Sales', 'Targets', 'Customers', etc.

4. Employment Terms: Reference to main employment contract and confirmation that this agreement supplements it

5. Commission Structure: Basic principles of commission calculation and earning conditions

6. Payment Terms: Timing and method of commission payments, including any holdbacks or adjustments

7. Targets and Quotas: Overview of sales targets or quotas that affect commission earnings

8. Territory and Customer Base: Definition of the employee's sales territory and/or customer portfolio

9. Commission Calculation Period: Specification of calculation periods and payment frequency

10. Adjustments and Clawbacks: Circumstances under which commission may be adjusted or reclaimed

11. Holiday Pay and Benefits: Treatment of commission in relation to holiday pay and other benefits as per Danish law

12. Termination Effects: Impact of employment termination on commission payments

13. Confidentiality: Provisions regarding confidentiality of commission terms and sales information

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

Optional Sections

1. Team Commission Structure: Used when employee works in teams with shared commission pools

2. International Sales: Include when employee handles international customers or territories

3. Product-Specific Commission Rates: Used when different products have varying commission structures

4. Key Account Handling: Include for employees managing strategic or key accounts

5. Commission Acceleration: Optional section for progressive commission rates based on achievement levels

6. Non-Standard Payment Terms: Include for any special payment arrangements or timing

7. Training and Support Requirements: Used when commission is tied to completion of specific training or support activities

Suggested Schedules

1. Schedule 1 - Commission Rates: Detailed commission percentages and calculation methods

2. Schedule 2 - Sales Targets: Specific sales targets and quotas for the current period

3. Schedule 3 - Territory Map/Customer List: Detailed definition of sales territory or assigned customer accounts

4. Schedule 4 - Commission Examples: Sample calculations showing how commission is calculated in various scenarios

5. Schedule 5 - Product List: List of products/services and their associated commission rates

6. Schedule 6 - Reporting Templates: Standard forms for sales and commission reporting

7. Appendix A - Performance Metrics: Detailed KPIs and performance measurement criteria

8. Appendix B - Administrative Procedures: Step-by-step procedures for commission reporting and claims

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