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Draw Explained

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18 Feb 08 #14330 by EmpireState
Topic started by EmpireState
Thanks for your interest. How to explain a draw? Like a salary, a draw is a fixed sum paid monthly to keep bread on the table whilst commission income is building. Unlike a salary, a draw is more like an advance against commisssions yet to be earned. e.g., has to be paid back. Once once the draw is covered, remaining commissions are paid to the salesman. Say a 100k draw, first 100k commissions pay back the "advance", excess commissions then start flowing to the salesman [producer]. [ If you don't make your draw, you eventually get fired rather than paying back what owe the firm]

A commission income can vary widely - 1x to 5x times draw how do courts handle this?

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