A commission split is the percentage of each closed deal's commission a brokerage retains before paying the balance to the agent who earned it, set out in that agent's independent-contractor agreement with the brokerage.
The commission itself carries no legislated rate anywhere in Canada — treadstonelaw's own summary puts it directly: “There is no standard rate fixed by law or by any regulator.” That figure is negotiated with the client and recorded in the listing agreement, with HST charged on top. The split is a second, separate negotiation — between the agent and the brokerage, over how that already-agreed commission is divided once it is collected.
RECO's Bulletin 6.2 on the remuneration clause confirms the tax treatment travels with the whole amount before any split happens: a remuneration clause must state a specific dollar figure plus applicable taxes, so dividing the commission afterward between brokerage and agent doesn't change what tax applied to the client's total. Because the split lives entirely inside the contractor agreement, it is also evidence in the CRA's own worker-classification test — the CRA's own contractor test notes that a genuine contractor “invoices, sets their own rate” rather than drawing a wage, and a negotiated split is one of the clearest markers of that.
Suppose a $12,000 commission closes on a sale, and the agent's contractor agreement sets a 70/30 split in the brokerage's favour before any cap is reached — a demonstration ratio only, not a published or typical rate. The brokerage retains $3,600, the agent is paid $8,400, and HST applies to the full $12,000 charged to the client regardless of how the brokerage and agent later divide it between themselves.
See also: The cap on a commission plan · Desk fee, defined · Independent contractor status, defined.
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