The Contract For Commission Based Employment is essential for businesses operating in Saudi Arabia that employ sales professionals and other commission-earning staff. This document is specifically designed to comply with Saudi Labor Law and related ministerial resolutions while establishing clear terms for commission-based compensation structures. It is particularly relevant when engaging employees whose compensation includes both fixed and variable components tied to performance metrics. The agreement addresses crucial aspects such as commission calculations, payment terms, performance targets, and territory assignments, while ensuring compliance with local employment regulations, including Saudization requirements and GOSI obligations. This contract type is commonly used in sectors such as real estate, financial services, and retail sales, where commission-based compensation is standard practice.
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1. Parties: Identification of the employer and employee with full legal names and addresses
2. Background: Context of the employment relationship and purpose of the agreement
3. Definitions: Key terms used throughout the agreement, including commission-related terminology
4. Appointment and Term: Details of the position, employment classification, and duration of employment
5. Duties and Responsibilities: Specific role requirements, targets, and performance expectations
6. Commission Structure: Base formula for commission calculation, qualifying sales/activities, and payment terms
7. Payment Terms: Details of salary, commission payment frequency, and calculation periods
8. Working Hours and Location: Standard working hours, flexibility provisions, and primary work location
9. Leave Entitlements: Annual leave, sick leave, and other leave entitlements as per Saudi Labor Law
10. Confidentiality: Protection of company information and trade secrets
11. Non-Competition: Restrictions on working with competitors during and after employment
12. Termination: Conditions and procedures for ending the employment relationship
13. Governing Law: Specification of Saudi Law as governing law and jurisdiction
14. General Provisions: Standard contractual provisions including amendments, notices, and entirety of agreement
1. Training Requirements: Used when specific training or certifications are required for the role
2. Territory Allocation: Include when the role involves specific geographic or customer territory assignments
3. Team Management: Required when the employee will have supervisory responsibilities
4. Expense Policy: Include when the role involves reimbursable business expenses
5. Remote Work Provisions: Used when the role allows for remote working arrangements
6. International Travel: Include for roles requiring travel outside Saudi Arabia
7. Intellectual Property: Required when the role involves creation of IP or creative work
8. Commission Clawback: Include when commission payments may need to be recovered in specific circumstances
1. Schedule 1 - Commission Calculation Methods: Detailed formulas and examples of commission calculations
2. Schedule 2 - Performance Metrics: Specific KPIs, targets, and measurement criteria
3. Schedule 3 - Territory/Account List: Detailed list of assigned customers or geographic territories
4. Schedule 4 - Product/Service List: List of products/services for which commission is applicable
5. Schedule 5 - Bonus Structure: Additional incentive schemes and qualification criteria
6. Appendix A - Company Policies: Relevant company policies affecting commission-based employees
7. Appendix B - Reporting Requirements: Templates and procedures for sales and commission reporting
Relevant legal definitions
Clauses
Relevant Industries
Real Estate
Financial Services
Insurance
Retail
Telecommunications
Automotive
Technology Sales
Medical Equipment
Industrial Equipment
Advertising and Media
Professional Services
Construction Materials
Pharmaceutical Sales
Luxury Goods
Relevant Teams
Sales
Business Development
Account Management
Commercial
Revenue
Field Operations
Client Services
Retail Operations
Channel Management
Direct Sales
Inside Sales
Product Specialists
Financial Advisory
Business Solutions
Relevant Roles
Sales Representative
Business Development Manager
Real Estate Agent
Insurance Broker
Recruitment Consultant
Account Executive
Sales Manager
Commission-based Consultant
Financial Advisor
Leasing Agent
Medical Sales Representative
Advertising Sales Executive
Territory Sales Manager
Commission-based Trainer
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