What should a Sales Commission Agreement include under Thai law?

1. Definitions and Interpretation
2. Commission and the Employment Contract
3. Term of the Plan and Changes
4. Calculation of Commission
5. When Commission is Earned and Credited
6. Statements and Payment
7. Returns, Cancellations and Adjustments
8. Sales Conduct
9. Targets
10. When the Employment Ends
11. Tax and Deductions
12. Personal Data
13. General

• No stamp duty is payable on this Agreement. It forms part of an employment contract, which is not an instrument listed in the Stamp Duty Schedule of the Thai Revenue Code. This is different from an appointment of an independent sales agent, which may carry duty as an appointment of an agent.
• If someone signs for the Employer under a power of attorney, the power of attorney itself carries stamp duty of 10 THB for a single act or 30 THB for more than one act (Instrument 7).

• Commission that an employee earns regularly for sales made in the course of the job is generally treated as wages under Thai labour law. That has three practical effects: the Employer may deduct from it only what the Labour Protection Act allows (section 76), late payment carries interest of 15% per year and a surcharge if the failure is wilful (section 9), and it may be included in the base for pay in lieu of notice and severance pay (Clause 2.2).
• A commission plan that lets the Employer cancel earned commission because the Employee resigned, or recover overpaid commission from salary, is likely to be unenforceable. This form avoids both (Clause 7.2 and Clause 10.1).
• A term of an employment contract that gives the Employer an excessive advantage can be limited by a court to what is fair (section 14/1). Keep targets realistic and changes to the plan transparent.

• Issue the commission statement within … days after each period (Clause 6.1) and keep the supporting invoices, credit notes and payment records. The Employee may inspect them (Clause 6.3).
• Decide splits of credit in writing before the order is accepted (Clause 5.3). Most commission disputes are about who gets credit, not about the rate.
• Returns and cancellations are adjusted only within … days after payment and only against future commission (Clause 7). Do not deduct overpaid commission from salary.
• Reducing the rates or changing the commission base needs the Employee's written consent (Clause 3.3). Reassigning accounts for business reasons needs … days' written notice (Clause 3.2), and orders already accepted stay with the Employee.

• Commission continues on orders accepted before the Termination Date that are paiddelivered and invoiced within … days afterwards (Clause 10.1), whatever the reason for leaving.
• Commission already earned must be paid with the final wages within the time the law requires. If the Employer terminates the employment, check whether average commission should be included in pay in lieu of notice and in severance pay.
• Moving a customer or delaying an invoice to avoid commission is a breach of Clause 10.3 and is strong evidence in a labour court.

• Commission is employment income under section 40(1) of the Revenue Code. Include it when withholding monthly income tax, and include it in the wages on which social security contributions are calculated, up to the statutory ceiling.

• Clause 8.1 prohibits bribery, side letters and agreements with competitors on prices or customers. Commission plans that reward volume at any cost create pressure to break these rules; review large or unusual deals before approving them.
• Customer personal data collected in the sales process belongs to the Employer as data controller. Remind sales staff not to keep customer lists in personal phones or messaging accounts.

• Both Parties should sign this Agreement and keep it with the Employment Contract. Give the Employee a complete copy including Schedule 1.
• If the Employee does not read English well, explain this Agreement or provide a Thai translation (Clause 13.7).
• Employment disputes go to the Labour Court, which works in Thai. A Party relying on this Agreement or on English emails must file a certified Thai translation.

Compiled from the notes that accompany the English contract templates on this site, published by Phuwara Krobtaku (ภูวรา ครอบตะคุ), Thai attorney-at-law, licence no. 477/2558. The short answer and summary at the top of this page are put together by the site from the template's clause headings and notes. Statutes are quoted only in the official Thai text: Thai is the only official language of Thai legislation, and an unofficial translation can mislead. Article registry OKC-5B4982. If you reuse this content, please credit the author and link to the original.