The commission split trap: before or after the deductions
Almost every argument about a commission statement is an argument about order, not about percentages. Both sides agree the split is 70/30 and the referral is 25%. They disagree about which one comes first — and on identical figures that disagreement is worth real money.
Everything below is invented. No rate, split, cap or fee on this page is typical, recommended or built into anything; they exist only to make the arithmetic visible.
The figures
A hypothetical closed sale of $380,000 at a total commission of 5%: 380,000 × 0.05 = $19,000 gross. Your side of a co-brokered deal is half: 19,000 × 0.50 = $9,500. A referring party is owed 25%: 9,500 × 0.25 = $2,375. The brokerage split is 70% to the agent.
Order A: the referral comes off the top
The referral is paid out of the commission, and what is left is what the brokerage and the agent divide.
9,500 − 2,375 = $7,125 to be split. Agent: 7,125 × 0.70 = $4,987.50. Brokerage: 7,125 × 0.30 = $2,137.50. Those two add back: 4,987.50 + 2,137.50 = $7,125.
Order B: the split comes first
The commission is divided, and the referral then comes out of the agent's share alone.
Agent: 9,500 × 0.70 = $6,650. Brokerage: 9,500 × 0.30 = $2,850. Then the referral: 6,650 − 2,375 = $4,275.
The same numbers, two answers
The agent gets 4,987.50 under A and 4,275 under B, a difference of 4,987.50 − 4,275 = $712.50. Look where it went: the brokerage takes 2,137.50 under A and 2,850 under B, and 2,850 − 2,137.50 = $712.50. Exactly the same money, moved from one party to the other.
It is not a coincidence, and the shape of it is worth remembering: the difference is the brokerage's share of the referral, 2,375 × 0.30 = $712.50. Taking a deduction off the top means both parties carry it in proportion. Taking it afterwards means one party carries all of it. That is the whole trap, and it holds for any deduction — a referral, a concession, a marketing charge, a rebate to the buyer.
Then the flat deductions, which do not care about order
Say a franchise or royalty fee of 6% of your side's gross, 9,500 × 0.06 = $570, plus errors-and-omissions cover at $60 and a transaction fee of $395. Those total 570 + 60 + 395 = $1,025 and come off the agent's share either way.
Under A: 4,987.50 − 1,025 = $3,962.50. Under B: 4,275 − 1,025 = $3,250.
Against the $19,000 that the deal generated in the first place, that is 3,962.50 ÷ 19,000 = 20.9% and 3,250 ÷ 19,000 = 17.1% respectively. One ordering clause in a document nobody re-reads is worth nearly four points of the gross.
A cap changes the split part-way through a deal
If your agreement caps what you pay the brokerage in a year, a transaction can cross that line in the middle. On the Order A figures, suppose $2,000 of cap remains. The brokerage's share of this deal is $2,137.50, so only $2,000 can be charged and 2,137.50 − 2,000 = $137.50 comes back to you: 4,987.50 + 137.50 = $5,125 before the flat deductions. A deal that started at 70% finished at 100%, and a statement that does not show both halves of that is impossible to check.
Only the contract decides
This is the part no calculator can do for you. Whether a deduction comes off the top or off your share, whether the referral is figured on the gross or on your side of it, and what counts toward a cap are all terms in an agreement. They differ between brokerages, between agents at the same brokerage, and between one year and the next. A tool that picked an order for you would be confidently wrong for a large share of its users, and this is not tax, legal or accounting advice about which order applies to you.
What arithmetic can do is make the disagreement precise. Run both orders, put the two numbers next to the clause, and the conversation stops being about whether it feels right.
The Commission Split & Cap Calculator reproduces one agreement, line by line, in the order it prints with every result: gross, your side's share, referral off the top, the broker split, the annual cap, then franchise, E&O, admin and other deductions, then the net to you. Every rate, split, cap and fee is a field you copy off your own paperwork; the arithmetic is whole cents throughout, so the printed lines add up to the printed total.