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User Topic: How does a draw against commissions work?
Catwoman
♀ 1330
Member # 1330
Default  Posted: 6:19 PM, February 25th (Tuesday), 2014View ProfileEdit MessagePrivate MessageHomepage

I am sure that there are several ways a draw against commissions works.

Does the money received in the draw then get debited against commissions earned until the "draw" is "repaid". If this is the case, it stands to reson that one gets paid the draw and then until the draw is repaid, does not receive commissions?

I am very interested to know the ways in which this might work.

Thanks.

Cat


FBS: Married 20 years, 2 daughters 25 and 22. Divorced by the grace of GOD.
D-Days: 2/23/93; 10/11/97; 3/5/03
Ex & OW Broke up 12-10
"An erection does not count as personal growth."

Posts: 29740 | Registered: Apr 2003 | From: Massachusetts
Whalers11
♀ 27544
Member # 27544
Default  Posted: 6:24 PM, February 25th (Tuesday), 2014View ProfileEdit MessagePrivate MessageHomepage

Does the money received in the draw then get debited against commissions earned until the "draw" is "repaid". If this is the case, it stands to reson that one gets paid the draw and then until the draw is repaid, does not receive commissions?

This is how I have usually seen draws work.

It's basically an advance on future commissions.

ETA: I know of one company that pays a monthly draw. Let's say the draw is $10,000. If your commissions are $11,000, you will get an additional $1,000 on top of the draw. If your commissions for that month are $9,000, you get to keep your draw, and the "debit" does not carry over to the next month. So you are guaranteed your draw for the month. I am not sure if that is a common method of doing it, though, because then to me that just sounds like a base salary?

[This message edited by Whalers11 at 6:28 PM, February 25th (Tuesday)]


Me: BGF - 33

I gave you more than I ever got back
You left me here to forget about that
All the things you thought you had have gone
Let that be a lesson to you
-Richie Kotzen, "Special"


Posts: 2326 | Registered: Feb 2010
Catwoman
♀ 1330
Member # 1330
Default  Posted: 6:27 PM, February 25th (Tuesday), 2014View ProfileEdit MessagePrivate MessageHomepage

So it basically only adjusts the "timing" of the payment--with a draw, you get more initially to get you started and your future earnings are supposed to pay that back.

That is what I thought. This should be interesting--the ex is claiming that the draw against commissions is not technically commission, so he shouldn't have to pay alimony on it.

Cat


FBS: Married 20 years, 2 daughters 25 and 22. Divorced by the grace of GOD.
D-Days: 2/23/93; 10/11/97; 3/5/03
Ex & OW Broke up 12-10
"An erection does not count as personal growth."

Posts: 29740 | Registered: Apr 2003 | From: Massachusetts
Whalers11
♀ 27544
Member # 27544
Default  Posted: 6:30 PM, February 25th (Tuesday), 2014View ProfileEdit MessagePrivate MessageHomepage

Cat, look at my edit where I added an example. Maybe that is what your ex is trying to argue?


Me: BGF - 33

I gave you more than I ever got back
You left me here to forget about that
All the things you thought you had have gone
Let that be a lesson to you
-Richie Kotzen, "Special"


Posts: 2326 | Registered: Feb 2010
Catwoman
♀ 1330
Member # 1330
Default  Posted: 6:43 PM, February 25th (Tuesday), 2014View ProfileEdit MessagePrivate MessageHomepage

No, the ex gets a salary, also. The draw is against, I believe, future commissions. He is trying to say that he doesn't have to pay alimony on it because it is a draw, I am saying it is commission because it is merely an advance on future commissions. If he gets paid a draw for say 6 months and then he goes the next six months earning no commission, he doesn't owe me alimony during the months he didn't earn commissions while he was paying back his draw. Therefore, what he is trying to do is keep from paying alimony on the draw (and, of course, report to the IRS that he is paying alimony on it. But that is another story).

Cat


FBS: Married 20 years, 2 daughters 25 and 22. Divorced by the grace of GOD.
D-Days: 2/23/93; 10/11/97; 3/5/03
Ex & OW Broke up 12-10
"An erection does not count as personal growth."

Posts: 29740 | Registered: Apr 2003 | From: Massachusetts
Whalers11
♀ 27544
Member # 27544
Default  Posted: 6:53 PM, February 25th (Tuesday), 2014View ProfileEdit MessagePrivate MessageHomepage

Well then... I would say, yes, conventional use of a "draw" is that it is an advance on future commissions. And that if you are entitled to alimony based on his commissions, that would include the amount he earns as a draw.

I hope someone else pipes up and can give you some more confirmation on that.


Me: BGF - 33

I gave you more than I ever got back
You left me here to forget about that
All the things you thought you had have gone
Let that be a lesson to you
-Richie Kotzen, "Special"


Posts: 2326 | Registered: Feb 2010
LoveActually
♀ 31030
Member # 31030
Default  Posted: 12:00 PM, February 26th (Wednesday), 2014View ProfileEdit MessagePrivate MessageHomepage

You really need to clarify with the employer if the draw has to be repaid. My husband received a 12 month draw in addition to his commission percentage as part of his hire package. They used the word "draw" in the actual employment contract, but it was a temporary draw that did not have to be repaid ever.


BS (Me)
WS (Him)
D-Day 5/29/09
Married 11 yrs, together 16 yrs

Posts: 789 | Registered: Jan 2011
gonnabe2016
♀ 34823
Member # 34823
Default  Posted: 11:04 PM, February 27th (Thursday), 2014View ProfileEdit MessagePrivate MessageHomepage

Your ex is such an ass.


it stands to reason that one gets paid the draw and then until the draw is repaid, does not receive commissions?

If he gets paid a draw for say 6 months and then he goes the next six months earning no commission

Uh-uh. He is still *earning* commission during that time period.....it is just being off-set by the amount that he was advanced, kwim?

You are definitely entitled to *your cut* of his commissions. The only question is probably going to be whether you will get your cut out of the *draw* amount taken (because it could be *argued* that the draw is a loan) or on his *true* commissions earned each month. Is it standard practice in his industry for 6 month draw's to occur? (That seems really risky for the employer to do, imo.)

Your perception of this is spot-on -- it is a matter of timing, but the bottom line is that it *is* commission-based. He's trying to mindfuck you.


"Oh, what a tangled web we weave when first we practice to deceive." - Sir Walter Scott

In my effort to be *concise*, I often come off as blunt and harsh. Sorry, don't mean to be offensive.


Posts: 8252 | Registered: Feb 2012 | From: Midwest
Topic Posts: 8

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