Making changes to commissions or deductions after the payout to the agents
In this sample deal, the transaction is closed and payments have been made out of Xero or QBO.
Scenario 1: Adjusting an Agent Overpayment (via Deductions)
To correct an overpayment, you can either adjust the original commission and allocations downward (resulting in a negative payout or invoice), or increase the deductions to reflect the amount the agent actually owed to the brokerage.
In this example, we’ll walk through adjusting the deductions:
- The agent earned $3,000 in commission
- Two fees were deducted, resulting in a net payout of $2,200
We need to increase the deal fee from $500 to $700, adding an additional $200 to the total deductions. You can do this by either:
- Adding a new fee of the same type for $200, or
- Overriding the existing deduction to reflect the corrected total of $700
This update ensures the total fee is accurate and the overpayment is properly corrected.
Before:
After:
Alternatively, you can override the existing deal fee deduction and update it directly to the corrected total of $700 as shown below.
Now by going to the Payout Commission page you can see that Loft has created a negative payout which will post an invoice to the agent in Xero.
Scenario 2: Agent Underpayment (Brokerage Owes Additional Funds)
In this scenario, you can either increase the commission and allocations to create an additional payout, or reduce the deal fees to reflect that the agent was over-deducted. This results in the brokerage owing the agent additional funds.
In this example:
- The agent earned $3,000 in commission
- Two fees were deducted, resulting in a net payout of $2,200
We will correct the deal fee, as the agent should have been charged $300 instead of $500. This reduces the total deductions by $200, meaning the agent was underpaid. The corrected net pay should be $2,400.
You can complete this adjustment in either of the following ways:
- Add a new Deal Fee of -$200 to offset the original $500 deduction, which will automatically update the net payout to $2,400 after saving, or
- Override the existing Deal Fee deduction and update it directly to $300
Both options ensure the deductions are correctly aligned and the agent is paid the correct amount.
Before:
After:
Alternatively, you can override the existing deal fee deduction and update it directly to the corrected total of $300 as shown below.
Now, by going to the Payout Commission page, you will see that Loft has generated a second payout, which will create an additional bill to the agent.
If a cheque has not yet been issued for the initial bill, you can group both payouts together and issue a single combined payment. Alternatively, you may process each payout separately.
Please ensure you are paying from the correct bank account where the funds are currently held to avoid any transfer or reconciliation issues between accounts.
Make sure you are paying from the bank account that is currently holding funds to avoid any transfer issues between accounts.
Handling Agents' Overpaid and Underpaid Commissions
| Scenario | Steps | Result | Example |
|---|---|---|---|
| Overpaid Commission | 1. Adjust the commission on the Commission Page (reduce to correct amount; allocations auto-adjust; manually override if needed; adjust deductions if necessary). 2. Go to Payout Commission Page >negative payout appears >posting generates an invoice for the agent to Xero. | Agent owes money back (negative payout) | Original: $1,200 Corrected: $1,000 Negative payout: $200 Invoice for $200 |
| Underpaid Commission | 1. Adjust the commission on the Commission Page (increase to correct amount; allocations auto-adjust; manually override if needed; adjust deductions if necessary). 2. Go to Payout Commission Page> positive payout appears >posting generates an additional payment to the agent. | Agent receives money owed (positive payout) | Original: $800 Corrected: $1,000 Positive payout: $200 Payment of $200 |
Key Notes:
Always verify commission, allocation, and deductions before posting payouts.
The Payout Commission Page reflects the difference between what was paid and the corrected commission.
Posting ensures the agent receives or returns the correct amount, keeping accounting accurate.
Related Articles
Adjusting a deal if an Agent has been overpaid or underpaid commissions
Sometimes a deal needs to be adjusted after an agent has already been paid due to updated information. In these cases, you don’t need to reverse and repost the original transactions. Instead, Loft allows you to quickly update allocations or ...Tracking Buyer Agent Commissions
Tracking Buyer Commissions: Staying Organized While Managing Deals As real estate practices evolve, buyer agent commissions are no longer always paid by the cooperating broker. This feature makes it essential for agents to stay organized and clearly ...Managing Deductions
How the deduction amount is calculated When a deal and/or agent matches a deduction's settings and the deduction is applied the amount will be calculated automatically. Let’s say we have a deduction with the amount based on the agent YTD commissions ...How to Add & Manage Allocations Correctly
Allocations are created in order to allocate portions of a deal's commissions to an agent, person, outside Brokerage, or organization, the allocation determines the end, amount and tax both paid and reported. Adding an Allocation Allocations will ...Adding New Commission and Deduction Adjustments for Agents
Commissions reward agents for their performance, while deductions account for adjustments, corrections, or agreed-upon reductions. Loft47 makes it easy to add new adjustments without changing past entries, so your records stay accurate and ...