Real Estate Brokerage Commission Splits Explained
Key Takeaway: A commission split is the percentage of an earned commission an agent retains after the brokerage deducts its share. Splits vary by model: fixed percentage, graduated scale, cap-based, or flat-fee. Royalty fees and team splits reduce the net further. The stated split is not the same as the agent’s actual net earnings.
TL;DR About Commission Splits
- Commission splits define how agents and brokerages divide earnings
- Split models include fixed, graduated, cap, and flat-fee structures
- Royalty fees reduce net agent earnings beyond the stated split
- Traditional brokerage splits vary by office location and agent
- Cloud-based brokerages typically publish standardized split schedules
- Cap systems allow 100% agent retention after a set threshold
- Net earnings require calculating all deductions combined
A commission split is the percentage of an earned commission that an agent retains after the brokerage deducts its share. Splits are structured as fixed percentages, graduated scales, cap-based systems, or flat-fee plans.
Many agents assume the stated split percentage is the only cost factor when evaluating a brokerage. Royalty fees, transaction fees, and team splits each reduce the agent’s net earnings beyond the stated split.
This article explains how commission splits fit into the broader Smart Agent Alliance brokerage comparison resources agents use to research and compare brokerages.
This article compares commission split structures across major national brokerages, explains how each model is calculated, and identifies the key variables that affect an agent’s net earnings:
Table of Contents
How Commissions Work
Commission structures in real estate determine how an agent’s earned commission is divided between the agent and the brokerage. The main structure types differ in how and when that division occurs.
Fixed Percentage Splits
The commission is split based on a fixed percentage agreed upon with the brokerage. Common splits include 50/50, 60/40, or 70/30.
Graduated Splits
Graduated splits adjust based on agent performance or time in the brokerage. An agent may start at a 50/50 split and move to 60/40 or higher after reaching sales thresholds or tenure milestones.
Cap System
In a cap system, the agent contributes a percentage of commissions to the brokerage until reaching a predetermined cap amount. After reaching the cap, the agent retains 100% of commissions for the remainder of the year.
For instance, if a brokerage sets a cap at $16,000, once the agent has paid that amount, all subsequent commissions that year are retained at 100%.
100% Commission Plan
With a 100% commission plan, the agent does not split commissions with the brokerage. Instead, the agent pays a flat fee per transaction and/or a recurring monthly fee.
Royalty Fees
Royalty fees are charged by franchise brokerages in addition to the commission split. Agents must factor royalty fees into any commission split comparison.
For example, if the split is 70/30 and the brokerage charges a 6% royalty fee, the agent’s effective split is 64/36.
Commission Math
The following calculations apply to the majority of brokerage commission structures.
Total Commission Calculation
An agent’s commission is a percentage of the sale price as specified in the listing or buyer agent agreement. Commission rates typically range from 1.5% to 3.5% per agent side.
- Home Sale Price: $1,000,000
- Agent Agreement Fee: 3%
- Agent Commission = $1,000,000 x 3% = $30,000
Splitting Agent Commission with the Brokerage
The agent splits the earned commission with the brokerage according to the contract terms.
- Agent’s Share: 80%
- Brokerage’s Share: 20%
- Agent’s Earnings = $30,000 x 80% = $24,000
- Brokerage’s Earnings = $30,000 x 20% = $6,000
Splitting Agent Commission with a Team
Team splits are applied after the brokerage split is calculated. An agent first splits with the brokerage, then the team’s percentage is applied to the remaining amount.
- Agent’s Earnings after brokerage split: $24,000
- Team’s Share: 25%
- Agent’s Net Earnings = $24,000 x 75% = $18,000
Research Challenges
Before comparing specific brokerages, two structural limitations affect how this data can be presented.
Caveat 1: Traditional Brokerage Model Splits Often Vary by Office
Quoting an exact commission split for traditional franchise brokerages is not possible using publicly available sources. Most established brokerages operate under this model.
Each franchise office is owned and operated by individual broker-owners who set commission splits independently. This information is not available through public sources.
Caveat 2: Traditional Brokerage Model Splits Often Vary by Agent
Different agents within the same traditional brokerage may have different commission splits. Variations are based on factors such as agent experience, production volume, and tenure. The criteria are determined by each broker-owner and are not standardized across locations.
Caveat Resolution: Solving the Traditional Brokerage Model Problem
Given the non-transparent nature of traditional brokerage models, the ranges below are derived from published research and direct interviews to represent what most agents at these brokerages typically receive.
Cloud-Based Brokerage Model Commission Splits
Cloud-based brokerages typically publish their commission split schedules publicly. These models do not operate franchise offices and generally do not maintain physical locations. This structure reduces operational overhead, which allows cloud-based brokerages to offer higher commission splits than franchise models.
Compare any large brokerage versus another in our brokerage comparison hub.
Commission Splits by Brokerage
Commission Structure Comparison: 9 Major Brokerages
| Brokerage | Commission Split | Annual Cap | Annual Agent Fees | Franchise / Royalty Fees |
|---|---|---|---|---|
| eXp Realty | 80/20 ? 100% after cap | $16,000 | $1,020/yr ($85/mo) | None |
| Real Brokerage | 85/15 ? 100% after cap | $12,000 | $750/yr + $249 startup | None |
| LPT Realty | 80/20 or $500/txn flat | $5K-$15K (by plan) | $500/yr + $89-$149/mo | None |
| Fathom Realty | 100/0, 88/12, or 80/20 (by plan) | $0 / $9K / $12K (by plan) | $700/yr + $99 activation | None |
| Keller Williams | 70/30 ? 100% after cap (MC variable) | $18K-$22K typical | Varies by MC ~$500-$1,200 | 6% of GCI (uncapped) |
| RE/MAX | 95/5 or 60/40 ? 80/20 (RAPP) | ~$23,000 on RAPP plans | $410/yr + monthly $500-$2,000 desk fees | 5% of GCI off top |
| Coldwell Banker | 55/45 to 90/10 (graduated) | No standard cap | $500-$1,200/yr typical | 6-8% of GCI |
| Century 21 | 70/30 (Kickstart) to 90/10 (Relentless) | Plan-dependent | ~$300-$1,000/yr + monthly fees | 6% standard, up to 8% (persists after cap) |
| Berkshire Hathaway HomeServices | 60/40 (new) to 80/20+ (top) | Most offices do not cap | Office-variable | 6-7% + ~1.5% marketing = 7-8.5% off top |
The brokerages below are listed in order of typical agent-side split, from lower to higher commission split ranges. New agent introductory splits are excluded from this comparison. Those rates are temporary and do not reflect standard ongoing compensation.
Redfin: 30/70 – 75/25
Redfin is a discount brokerage that charges lower fees to clients and pays lower splits to agents. Redfin agents are salaried and may earn higher splits by developing their own client base.
Corcoran: 50/50 – 70/30
A traditional brokerage with a 6% royalty fee. Splits vary by office and agent experience.
Douglas Elliman: 50/50 – 70/30
A traditional brokerage with a 6% royalty fee. Splits depend on agent experience and production.
Coldwell Banker: 55/45 – 90/10
A traditional brokerage with royalty fees ranging from 5% to 6.5%. Higher splits are available to experienced agents.
Berkshire Hathaway: 60/40 – 90/10
Berkshire Hathaway operates under a traditional model with a 6% royalty fee. Splits reach up to 90/10 for top-producing agents.
Better Homes & Gardens: 60/40 – 80/20
A traditional brokerage with a 6% royalty fee.
Compass: 60/40 – 92.5/7.5
A traditional hybrid brokerage with a 4% fee.
The Agency: 70/30 – 90/10
A traditional brokerage operating with a 6% royalty fee.
Sotheby’s: 70/30 – 90/10
A traditional brokerage with a 6% royalty fee.
RE/MAX: 60/40 – 95/5
RE/MAX is a traditional brokerage with a 5% royalty fee. Experienced agents may reach up to a 95/5 split.
Century 21: 70/30 – 92/8
A traditional brokerage with a cap of approximately $22,500 and an 8% fee. Splits benefit high-volume agents who reach the cap.
Keller Williams: 70/30 – 100/0
Keller Williams is a traditional brokerage with a cap of $21,000 to $30,000 and a 6% royalty fee until the cap is reached. Agents retain 100% after capping.
eXp Realty: 80/20 – 100/0
A cloud-based brokerage with a cap of $16,000 and no royalty fees. Agents retain 100% of commissions after reaching the annual cap.
Additional Factors in Brokerage Selection
Beyond the commission split, agents should evaluate brokerage fees, support, training, resources, tools, and community structure. These factors collectively affect the value an agent receives from the brokerage relationship.
Agents should also consider a brokerage’s approach to future growth, passive income structures, and long-term viability in an industry facing ongoing legal and market changes.
What Agents Also Ask About Brokerage Commission Splits
Do all real estate brokerages charge royalty fees?
Traditional franchise brokerages typically charge royalty fees ranging from 4% to 8% of each commission. Cloud-based brokerages without franchise structures generally do not charge royalty fees. Agents should confirm fee structures directly with each brokerage before signing a contract.
Can an agent negotiate their commission split?
At traditional brokerages, commission splits are negotiated individually and vary by agent. At cap-based or cloud brokerages, splits are typically standardized and published in advance. Negotiated splits at traditional brokerages may increase as an agent’s production grows.
What happens to my commission split after I cap?
When an agent reaches the cap threshold, the brokerage stops collecting its share of commissions for the remainder of the annual period. After capping, the agent retains 100% of each commission until the period resets.
How does a team split affect what I keep?
Team splits are applied after the brokerage split is calculated. An agent first splits with the brokerage, then the team’s percentage is applied to the remaining amount. The result is the agent’s net earnings per transaction.
Why This Matters
Commission splits determine how much of each earned commission an agent retains after the brokerage deducts its share. The split structure an agent operates under affects net earnings on every transaction throughout the year.
When agents join eXp Realty, they receive the same core brokerage platform, including compliance, compensation, and access to company divisions. What differs is the sponsor ecosystem an agent aligns with.
The sponsor an agent selects shapes which tools, training, and attraction systems they have access to, if any, including whether that agent receives guidance on how to evaluate and compare split structures before selecting a brokerage. Understanding how commission splits are calculated, including all deductions, helps an agent make an informed comparison before committing to a brokerage contract.
What Is a 100% Commission Split in Real Estate?
A 100% commission split means the agent keeps the full gross commission from a transaction rather than dividing a percentage with the brokerage. Instead of a split, the brokerage is compensated through flat per-transaction fees, monthly or annual membership fees, and E&O coverage charges. The phrase “100% commission” refers to the agent’s share of client-paid commission – not a zero-cost arrangement.
Two distinct models use this label, and they work differently:
True 100%: Flat Fee From Day One
Under a true 100% model, the agent never splits a percentage of any commission with the brokerage. A flat per-transaction fee replaces the split on every deal from the agent’s first closing. Brokerages such as HomeSmart and Realty ONE Group operate this way. The agent nets gross commission minus that flat fee regardless of deal size or annual volume.
Capped 100%: Full Retention After a Threshold
Under a capped split model, the agent starts at an 80/20 or 85/15 split and earns 100% retention once the brokerage has collected a fixed dollar amount for the year – the cap. After capping, every subsequent deal closes at 100% until the annual period resets. eXp Realty (80/20 split, $16,000 cap), Real Broker (85/15 split, $12,000 cap), Keller Williams (70/30 split, $18,000-$22,000 cap range), and LPT Realty all use this structure.
Agents who do not close enough volume to hit the cap in a given year never reach the 100% tier for that period. This is the most important distinction when comparing brokerages that advertise “100% commission.”
What Replaces the Percentage Split?
At any 100% commission brokerage, the brokerage earns its revenue from fees rather than a percentage of each commission. Common fee types include:
- Per-transaction flat fees (amount varies by brokerage and plan)
- Monthly or annual desk and technology fees
- E&O (errors and omissions) insurance fees per closing, often with an annual cap
- One-time onboarding or startup fees
An agent’s net earnings equal gross commission minus all applicable fees combined – not just the stated split percentage.
What Agents Actually Keep: Side-by-Side
The table below uses the same $30,000 gross commission from the “Commission Math” section above to show the net difference across three model types. Individual results depend on deal volume, average commission size, and each brokerage’s specific fee schedule.
| Model | Split Structure | Royalty or Off-Top Deduction | Agent Net on This Deal |
|---|---|---|---|
| Traditional franchise (KW-style: 70/30 + 6% royalty) | 70% to agent, applied after royalty | 6% royalty = $1,800 off gross; remaining $28,200 split 70/30 | $19,740 |
| Capped cloud brokerage (eXp-style: 80/20, before cap) | 80% to agent | No royalty fee | $24,000 |
| True 100% flat-fee brokerage | 100% to agent | Per-transaction flat fee (amount varies by brokerage) | $30,000 minus flat fee |
On a single $30,000 commission, the capped cloud model returns $4,260 more than the traditional franchise model before factoring in monthly fees on either side. Royalty fees at franchise brokerages apply to every deal regardless of volume, compounding their impact across an agent’s full annual production.
Pros and Cons of 100% Commission Brokerages
Advantages
- Higher per-deal retention. Agents keep more of each commission, especially on larger transactions where a percentage difference represents a significant dollar amount.
- Predictable fee structure. Flat monthly fees and per-deal charges are easier to budget around than percentage-based deductions tied to deal size.
- No royalty fees. Cloud-based and flat-fee brokerages generally do not charge the royalty fees common at traditional franchise models, which reduce agent net earnings on every deal regardless of the stated split.
- Scales with production. Flat fees become a smaller fraction of total income as deal volume increases, making the structure more efficient the more an agent closes.
Disadvantages
- Lighter training and mentorship. Most 100% commission brokerages operate with leaner in-house support. Agents who need hands-on broker guidance may find fewer resources than at a traditional brokerage.
- Lower brand recognition at some firms. Cloud-based and regional flat-fee brokerages may carry less franchise name recognition in markets where established brand identity matters to clients.
- Break-even volume required at capped brokerages. The 100% tier is available only after the agent hits the annual cap threshold. Agents closing fewer than 6 transactions per year at a capped-split brokerage may not reach the 100% tier and see no benefit from it.
- Ongoing fees persist after capping. Monthly technology fees and per-deal charges continue after an agent caps. Net retention is 100% of commission minus those fees, not zero cost.
Is a 100% Commission Plan Right for You?
The math favors a 100% commission structure most strongly for agents who generate their own business, close consistently through the year, and do not depend on the brokerage for leads or in-house mentorship.
100% Commission Tends to Fit Well When:
- You close 10 or more transactions per year and can capture the full per-deal savings across a meaningful volume
- You work in a higher-price market where each percentage point retained adds up to a significant dollar amount per deal
- You are self-directed and manage your own lead generation and marketing
- You want fee predictability to plan your business expenses in advance
A Traditional Split May Serve You Better If:
- You are in your first couple of years and rely on the brokerage for active mentorship and transaction guidance
- You expect to close fewer than 6 transactions this year – at that volume, monthly fees at a cap-based brokerage can exceed what you would have paid in percentage splits
- Your market strongly values a recognized franchise brand for client credibility
Questions to Ask Before You Sign
- What is my total annual cost if I close 6 or 10 transactions this year, including monthly fees, per-deal fees, E&O charges, and cap contributions?
- Does the cap reset on a calendar year or my personal anniversary date?
- What happens to split contributions already paid if I leave before the cap resets?
- Is broker supervision and compliance review included, or charged as an added fee per transaction?
- What training or mentorship resources are available and at what cost?
How the 2024 NAR Settlement Affects the Commission Structure Decision
The August 2024 NAR settlement changed how buyer-agent compensation is communicated and negotiated. Offers of buyer-agent compensation can no longer be advertised in MLS listings. Agents must have a signed buyer representation agreement in place that specifies their compensation before showing homes to a buyer client.
These requirements apply at every brokerage model. For agents evaluating commission structures, the practical implication is direct: when compensation is negotiated in writing with each client rather than set by MLS convention, understanding your own fee structure precisely is a baseline skill. An agent who knows exactly what they need to net on a transaction is better positioned to negotiate compensation that reflects what they are worth.
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Karrie Hill
Co-Founder, Smart Agent Alliance
Licensed real estate agent - license #02160215 (CA) - Brokered by eXp Realty
UC Berkeley Law (top 5%). Built a six-figure real estate business in her first full year without cold calling or door knocking, now coaching other agents to greater success.
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