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.
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Karrie Hill
Co-Founder, Smart Agent Alliance
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.