A draw against commission is money your employer pays you in advance of commissions you are expected to earn.
If your commissions don’t cover the draw, you don’t automatically owe the difference from your own pocket. Your employment agreement, the type of draw and the employment laws that apply to your job determine what can be recovered.
For the broader rules on earning and receiving commissions, read our guide to commission pay in Canada.
⚠️ Asked to repay a commission draw? A negative balance on your employer’s records doesn’t prove you personally owe that amount. Have the agreement and calculation reviewed before acknowledging a debt or authorizing deductions.
Reviewed by: Lior Samfiru, Employment Lawyer and National Co-Managing Partner
On This Page:
- 1. How It Works
- 2. Types of Draws
- 3. Repayment
- 4. Deductions & Minimum Wage
- 5. Leaving Your Job
- 6. What to Check
- 7. Common Questions
How Does a Draw Against Commission Work?
Your employer pays an agreed advance, then compares it with the commissions you earn. If your commissions exceed the advance, you receive the additional amount, subject to the plan’s terms and any lawful adjustments.
Example: You receive a $3,000 draw and earn $4,500 in commissions for the same period. With no earlier balance or other adjustments, you receive another $1,500. Your total gross compensation is $4,500—not $7,500.
If you earn only $2,000 in commissions, there is a $1,000 shortfall. Whether that amount carries forward or must be repaid depends on the arrangement and applicable law.
Recoverable vs. Non-Recoverable Draws
Recoverable draw
A recoverable draw allows the employer to recover an advance under the agreed terms. This can involve applying future commissions against a shortfall. Some agreements also require repayment from the employee’s own funds.
Those are different obligations. Check whether recovery is limited to commissions or extends to personal repayment, including after employment ends.
Non-recoverable draw
A non-recoverable draw provides a guaranteed level of compensation. If commissions fall short, the employer absorbs the difference rather than requiring you to repay it from your own money.
Commissions above the guaranteed amount can still produce additional pay under the plan.
Do You Have to Pay Back a Draw Against Commission?
Not automatically. The words “draw against commission” don’t, by themselves, establish a personal repayment obligation.
Your contract needs to be read as a whole. An agreement allowing recovery from earned commissions is different from one requiring you to repay a shortfall from savings or other income.
Our Firm Defeated a $32,983 Commission-Draw Claim
In 2250898 Ontario Inc. v. Pepe, Samfiru Tumarkin LLP successfully appealed a judgment requiring an employee to repay commission draws. The Ontario Divisional Court dismissed the employer’s $32,983.08 claim. The agreement didn’t establish the personal repayment obligation the employer alleged.
Can Your Employer Deduct a Draw From Your Pay?
A repayment obligation and permission to deduct wages are separate questions. Your employer must follow the wage-deduction rules that apply to your employment.
Minimum-wage protections also matter. For provincially regulated employees:
- Ontario: Certain negative draw balances can carry forward, but adjusting commissions can’t reduce a covered employee’s gross earnings below minimum wage for the hours worked in any pay period
- British Columbia: Wages required to meet minimum wage in one pay period can’t be treated as a repayable draw against commissions earned in a later period
- Alberta: Some salespeople have a weekly minimum wage rather than an hourly minimum. Draw arrangements and deductions must respect the rules applying to that job
Occupational exemptions and special rules apply. Written authorization may be required for a deduction, but it doesn’t make an otherwise prohibited deduction lawful.
What Happens to Your Commission Draw If You Quit or Are Fired?
Leaving the company doesn’t automatically turn a draw shortfall into a debt—or cancel an enforceable repayment obligation. Review what the agreement says about termination and resignation.
Your employer should provide a calculation showing advances paid, commissions credited and any claimed balance. Commissions that become payable after you leave may affect that calculation.
If you are dismissed, your severance assessment should consider your actual compensation structure, including relevant commission income. The draw shouldn’t be counted twice by adding it to the commissions it already advances.
If your termination offer deducts a draw balance, have your severance package reviewed before accepting it.
What Should You Check in a Commission Draw Agreement?
- Guarantee: Is the draw recoverable, non-recoverable or guaranteed only for a limited period?
- Calculation: When are commissions earned and credited against the draw?
- Shortfalls: Can balances carry forward, and when do they reset?
- Repayment: Is recovery limited to commissions, or does the agreement require personal repayment?
- Departure: What happens if you resign, are dismissed or have outstanding sales?
Keep your agreement, commission statements, pay records and relevant messages. Read more about reviewing an employment contract.
Draw Against Commission: FAQs
Is a draw the same as a base salary?
No. A draw is applied against commission earnings. A base salary plus commission provides separate salary and commission components. Regular payments can look similar while creating different rights.
Can your employer reduce your draw or make it repayable?
A substantial, unauthorized change to agreed compensation can amount to constructive dismissal. Get advice before accepting new terms or resigning.
What if you’re unionized?
Contact your union about your compensation agreement, deductions and grievance deadlines. Our employment law team represents non-union employees.
Asked to Repay a Commission Draw?
Don’t assume your employer’s calculation settles what you owe. Samfiru Tumarkin LLP helps non-union employees in Ontario, Alberta and British Columbia with commission agreements, repayment demands, unpaid compensation and termination packages.
Before you sign, always check first.
➡️ Get Advice About Your Commission Draw or call 1-855-821-5900.