Worked example
A rep was paid $12,000 upfront on a 12-month contract. The customer cancelled after 4 months, and the plan recovers the unearned months on a prorated basis.
| Input | Value |
|---|---|
| Commission paid on the deal | $12,000.00 |
| Contract length (months) | 12 |
| Months the customer stayed | 4 |
| Clawback method | Prorated: recover the unearned months |
| Protection period (months) | 6 |
| Result | Value |
|---|---|
| Amount clawed back | $8,000.00 |
| Commission the rep keeps | $4,000.00 |
| Share of commission kept | 33.33% |
| Unserved contract months | 8 mo |
- Unserved months: contract − months stayed: 8 mo
- Commission × unserved months ÷ contract months: $8,000.00
- Commission kept: paid − clawed back: $4,000.00
The three clawback methods
Prorated clawback = commission paid × (contract months − months stayed) ÷ contract months
Full clawback = commission paid, if months stayed < contract months
Protected clawback = commission paid, if months stayed < protection period; otherwise 0
Prorated treats the commission as earned month by month. Full treats it as earned only when the whole contract is served. A protection period draws a single line: survive it and the commission is safe, fall short and all of it comes back. In this calculator the protection rule is all-or-nothing; if your plan prorates inside the protection window, use the prorated result for that case.
Amounts are rounded to the cent and “kept” is computed as paid minus clawed back, so the two always add up to the original payout.
How to use it
- Enter the commission actually paid on the deal (after any split — see the commission split calculator).
- Enter the contract length and the number of full months the customer paid for.
- Pick the rule written in your plan; the protection period field is only read by the protection method.
Limitations and caveats
- One deal at a time. Plans that net clawbacks against the next period’s commission are better modelled in the plan simulator.
- It does not check whether a clawback is enforceable. Recovery from wages is regulated differently from one jurisdiction to another; this page is not legal advice.
- Partial months are not modelled: enter whole months as your plan counts them.
Frequently asked questions
What is a commission clawback?
It is a plan provision that lets the company recover commission already paid when the underlying revenue does not materialize — typically a cancellation, a refund or non-payment within a defined window.
Is a prorated clawback fairer than a full one?
It ties the recovery to the revenue actually lost, which is easier to explain. A full clawback is simpler to administer but can take back commission on months the customer did pay for. Which one fits is a plan-design decision.
Can an employer take a clawback out of my paycheck?
It depends on your signed plan and on the wage laws where you work. We do not give legal advice; ask an employment lawyer or your HR team.
What happens if the customer stays longer than the contract?
Nothing is recovered: once the full term is served, every method returns a clawback of zero.