What is a recourse draw?

A recoverable draw is a fixed amount advanced to an employee within a given time period. If the employee earns more in commissions than the draw amount, the employer pays the employee the difference after the commissions have been earned.

How does a recoverable draw work in sales?

Under a recoverable draw, the amount paid as recoverable draw (difference between total pay and commissions earned) carries over as a balance to the next pay period for reps to repay to the company. For example, imagine a sales rep is eligible for a $1,500 draw for the pay period, and at the end of period, they end up earning $500 in commissions.

How are sales reps paid for a draw?

Like a regular draw against commission, a draw amount is established for each sales rep and reps are paid the difference between the draw and their total earned commissions.

What happens when a salesperson wins more than the draw?

When the commissions are earned, the salesperson pays back the draw. When the amount of commission earned is more than the draw, the salesperson receives the draw amount plus whatever is left over after the draw balance is paid off. When the commission earned is less than the draw, the salesperson receives the draw amount only.

How does a recoverable draw against commission work?

Recoverable Draw Against Commission Under a recoverable draw, the amount paid as ‘recoverable’ (the difference between total pay and commissions earned) carries over as a balance to the next pay period for reps to repay to the company.

Like a regular draw against commission, a draw amount is established for each sales rep and reps are paid the difference between the draw and their total earned commissions.

What does it mean to draw on sales commissions?

A draw is a simply a pay advance against expected earnings or commissions. Sales commission structures are usually designed to give an employee some control over how much they earn during a certain time period.