They are usually paid as an offset to expenses, such as phone and rents. Agencies and producers who pay their own expenses often receive override commissions. Add overriding commission to one of your lists below, or create a new one. This article contains general legal information but does not constitute professional legal advice for your particular situation.
- She serves clients from F500 to growth-stage businesses, and advises WorldatWork on sales compensation hot topics and best practices.
- It may also refer to the amount owed to the owners of an acquired company in addition to the acquisition costs.
- For example, you may have a sales person with a 5% commission (earns 5% of the sales value of whatever they sell).
- An “override” (also sometimes called an overwrite) is a commission paid on the sales someone else makes.
She is a recognized expert in sales compensation plan design, regularly speaking at conferences and writing published articles. She serves clients from F500 to growth-stage businesses, and advises WorldatWork on sales compensation hot topics and best practices. This commission is paid to a primary agent for sales made by subagents in his or her territory.
OVERRIDING COMMISSION Definition & Legal Meaning
Rana brothers paid Rs 1,500 for unloading, Rs 1,800 for godown rent and Rs 3,500 for advertising. They were entitled to an ordinary commission of 10% on regular selling price and an overriding commission of 15% on any amount realized over and above the regular selling price. Overrides are often paid to the agency as a percentage of the agency’s commission rather than a percentage of the premium. However, the agency commission tables are set up as a percentage of premium. Overriding commission is an insurance commission paid by an insurer to an agent or managing general agent for premium volume produced by other agents in a given geographic territory.
It may also refer to the amount owed to the owners of an acquired company in addition to the acquisition costs. Overriding commission is a type of commission which a consignor grants to the consignee who achieves a specific sales target or whose total sales revenue exceeds a specified amount. It encourages consignee to realize the best possible price for goods sold. Sometime it is given to consignee as an incentive for putting his efforts to introduce, promote and create market for a new product in certain areas. In reinsurance, it is a commission paid to an intermediary in return for placing a retrocession of reinsurance.
The Law Dictionary
An “override” (also sometimes called an overwrite) is a commission paid on the sales someone else makes. For example, you may have a sales person with a 5% commission (earns 5% of the sales value of whatever they sell). This person may have a sale manager with 6 direct reports, and may receive as his/her compensation 1% of the sales of all the people reporting to him/her. It is a common sales compensation mechanic in small or early stage businesses.
The Law Dictionary is not a law firm, and this page does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction. Rana Brothers sent payment for the balance due directly to the bank account of Ali Brothers via internet banking.
