Managing Deductions

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 that should only be applied to Standard deals.

The deduction has been configured to have three levels (Read: Deduction Settings - For a Brokerage, below):

  1. Level One, Amount: 10%, Agent YTD commission range: $0 - $25,000

  2. Level Two, Amount: 5%, Agent YTD commission range: $25,000.00 - $50,000

  3. Level Three, Amount: 2%, Agent YTD commission range: $50,000.00 - No Cap

When a Standard deal is created and the agent has a YTD commission that falls within any of the deduction's levels, it will be applied to the deal.

Example 1 - Agent YTD commissions: $10,000

If the agent in question has YTD commissions of $10,000 Level One will be selected and the calculated amount will be $1,000 ($10,000 * 10%).

Example 2 - Agent YTD commissions: $30,000

If the agent has a YTD of $30,000 Level Two will be selected and the calculated amount will be $1,500 ($30,000 * 5%).

Example 3 - Agent YTD commissions: $60,000

If the agent has a YTD of $60,000 Level Three will be selected as there is no cap on the range. The calculated amount will be $1,200 ($60,000 * 2%).

Deduction Settings

For a Brokerage

A brokerage’s deductions are set up during on-boarding.  This is when you decide which settings a deal or agent must match to determine how or when the deduction is applied.

Some example settings: 

  • Is the amount calculated as a percent or dollar amount?

  • Is the deduction taxable?

  • What range is the amount based on? (Ex: agent’s YTD gross commissions, the deal’s sell price)

  • What deal types should the deduction apply to? (Ex: Standard, Referral)

  • Is there a maximum amount that can be deducted?

In addition to the settings a deduction must have one or many levels. The levels are used to calculate the amount that will be deducted when the deduction is applied to an agent or broker.

A level has a name, amount (% or $) and a range (e.g. agent YTD, deal sell price).

For an agent or broker

If you want a deduction to be applied differently for a specific agent or broker the levels can be overridden in the person’s profile. Once a level override is added to a deduction for a profile, all of the levels from the brokerage settings for the deduction will be ignored.

Click the pencil next to the deduction you want to change the amount and level for

Then click new

Change the amount and, if necessary, the level.

Once all of the conditions for a deductions have been met and it is applied to an agent on a deal. At this point a deduction’s calculated amount can be overridden by percent or dollar amount on the deductions page. If you would like the deduction to be ignored altogether for this deal set the override to 0% or $0.

For a payout

During a payout you can override how much of a deduction is deducted by filling out the Payout Override field. In the example below the Payout Override for the Office Split deduction is set to $300. The deduction amount will remain at $1,500 if none of the deduction's conditions are changed. The deducted amount will change to $300 after the payout is paid. During the next payout for this deal the Default Amount for the Office Split will be $1,200, since $300 has already been taken.

Deduction Automation

If part or all of a deduction is deducted during a payout that amount will be displayed on the deductions page. This does not stop the deduction from being automatically calculated. Depending on the deduction settings the calculated amount may fluctuate. 

Example: A deduction’s range is based on the deal Sale Price and the amount is a flat dollar amount for each level. If the sale price is updated and no longer falls within the previous level’s range, the calculated amount will change to match the next level’s flat amount.

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