Reading a commission statement properly

Line one: the gross commission, and where that number actually came from

The top line of a commission statement is not a fixed industry percentage — it’s the output of a private negotiation. Treadstonelaw’s own guidance is direct: “there is no standard rate fixed by law or by any regulator, so the number in your listing agreement is the number.” Whatever figure appears at the top of your statement should trace directly back to the rate written into the listing agreement (or, on the buyer side, the buyer representation agreement) for that specific transaction. If it doesn’t match what you signed, that’s the first thing to query — not the split further down the statement.

Line two: any remuneration-clause adjustment

Where a seller agreed to compensate a buyer’s brokerage under a remuneration clause in the agreement of purchase and sale, RECO’s Bulletin 6.2 shows exactly what determines the number that flows through: the clause’s stated amount, whether tax was included in that figure, and — the part that most affects the final number on a statement — what happens if the seller’s offer doesn’t match what the buyer actually owes under their representation agreement. If the seller offered more than the buyer owed, the buyer representation agreement should specify whether the buyer keeps the excess or the brokerage does; if the seller offered less, it should specify whether the buyer covers the shortfall. A statement that shows a different net figure than the raw remuneration-clause amount is very likely reflecting exactly this kind of true-up, not an error.

Line three: HST, which was never your money to begin with

A commission statement typically separates the pre-tax commission from an HST line. That distinction matters because HST isn’t part of your income at all — it’s collected on behalf of the government under the Excise Tax Act s. 165(1), which sets the GST rate at 5%, plus whatever provincial component applies where HST is in effect (no single provincial rate is quotable from the federal Act itself — check your province’s current rate directly). Under s. 148(1)(b), once your revenue crosses the $30,000 small-supplier threshold measured over the preceding four calendar quarters, you’re required to be registered and charging it — which for most actively producing agents happens almost immediately. Treating the HST line as spendable income, rather than money already earmarked for remittance, is one of the most common ways an agent ends up short at filing time; see setting aside tax from every cheque for how to handle that line as each statement arrives.

Line four: your split, and where it comes from

The brokerage split — the percentage the brokerage retains before disbursing the balance to you — is not something any regulator sets either. It comes from your own independent-contractor agreement with the brokerage, which typically also covers desk fees, franchise fees, technology fees or marketing fund contributions, and how those are calculated (a flat monthly fee, a percentage, or a cap that reduces the split once you’ve reached a certain production level in the year). None of the sources reviewed for this article found a regulator that standardizes any of these figures — they are entirely a matter of your own brokerage agreement, and a statement that shows a split you don’t recognize should be checked against that agreement directly, not assumed to be an error or accepted without confirming.

Line five: any referral deduction — and whether you were told about it in advance

If a statement shows a referral fee deducted before your net is calculated, RECO’s Bulletin 3.3 sets the standard that deduction should have already met: disclosure to the client, in writing, before the benefit was received — not a surprise line item discovered for the first time on the statement itself. The bulletin requires the disclosure to specify what the benefit is, an estimate of its value, whether it’s direct or indirect, and who’s receiving it. If a referral deduction appears on your statement that you don’t recall disclosing, that’s worth raising with your brokerage directly — the compliance obligation runs to the client’s disclosure, but the paper trail should exist on the brokerage’s side too. See paying a referral out of province for the fuller mechanics of how a referral payment is supposed to move.

Keep the statement itself — for exactly as long as the law requires the records behind it

A commission statement is one of the records the Income Tax Act s. 230(1) requires you to keep — every person carrying on a business must keep records and books of account at their place of business or residence in Canada, and under ITR 5800(1)(c), a sole proprietor’s general ledger and contracts must be retained for six years after the end of the taxation year the business ceased. Under the Excise Tax Act, s. 286(1) imposes the same six-year retention for GST/HST records. A commission statement is the clearest single document tying your reported income to the actual transaction and tax it was calculated on — keep every one of them, not just a running total, for the full retention period.

Common questions

Why does my net payment sometimes differ from my split percentage times the gross commission?

Because the split is applied after other deductions — desk or franchise fees, a marketing fund contribution, or a disclosed referral fee — not necessarily to the raw gross figure alone. Check your independent-contractor agreement for exactly what’s deducted, and in what order, before assuming an error.

Is the HST on my statement mine to keep if I’m under the $30,000 threshold?

If you’re genuinely under the small-supplier threshold and not registered, you shouldn’t be charging HST at all. Once you’ve crossed the $30,000 threshold and registered, the HST shown is collected on the government’s behalf and needs to be remitted, not treated as income.

What if a referral deduction shows up that I never agreed to?

Raise it with your brokerage directly. RECO’s Bulletin 3.3 requires written disclosure to the client before a financial benefit like a referral fee is received — a deduction with no matching disclosure on file is a compliance gap worth flagging, not something to accept silently.