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Commission Draw

A recoverable draw is a loan wearing a salary's clothes. See the breakeven before you sign.

A draw against commission guarantees a monthly check — but if it is recoverable, every month your commissions fall short of the draw, the difference piles into a deficit you must repay out of future commissions, and often owe back if you leave. The math is brutal and simple: breakeven sales = draw ÷ commission rate. A $4,000 draw at 10% requires $40,000 of sales every single month just to stay flat. This calculator models your ramp month by month so you can see when you climb above the draw — or how deep the hole gets.

Why people use this

Sales reps weighing a draw-against-commission offer use it to find the breakeven — draw ÷ rate — and to watch the recoverable deficit snowball month by month, including the balance they would owe back if they walked.

How it works

1. Each month: if commission ≤ draw, you are paid the draw and (if recoverable) the shortfall is added to your deficit.
2. When commission exceeds the draw, the excess first repays any accumulated deficit; only the remainder reaches your paycheck above the draw.
3. Breakeven = draw ÷ commission rate — the sales pace where commission exactly covers the draw.
4. Non-recoverable draws skip the deficit entirely: shortfalls are forgiven, which is why employers size them smaller.

Common questions

My offer is a $4,000/month draw at 10% commission. What am I really signing?

A requirement to sell $40,000 every month to break even. Ramp slower — say $20k, $30k, $45k, $55k of sales — and after four months you have been paid $16,000 but carry a $1,000 deficit that future commissions must repay. Recoverable deficits typically survive termination: leave with a $3,000 balance and most contracts make it due. California and New York limit clawbacks, but the contract usually controls.

Recoverable vs non-recoverable — how much is the difference worth?

The full shortfall, every slow month. On a $4,000 draw with $2,000 of commissions, a recoverable plan pays you $4,000 and books a $2,000 debt; a non-recoverable plan pays $4,000 and forgets it. Over a six-month slow ramp that gap can reach five figures — which is exactly why non-recoverable draws are smaller or expire after a few months.

When do I actually earn more than the draw?

Only after two hurdles: your monthly commission must exceed the draw AND any accumulated deficit must be repaid. With a $4,000 draw, a $3,000 deficit, and a $6,500 commission month, you take home $5,000 — the draw plus $1,000 after $1,500 of excess went to the deficit. The calculator's month table shows both hurdles explicitly so the ramp is honest.

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