Calculate your net commission after broker splits, desk fees, and taxes
New agents often start at a 50/50 split and earn their way to 70/30 or higher as they close more deals. Flat-fee brokerages like eXp Realty and Redfin offer alternatives — some with an 80/20 split capped at a certain annual threshold. Understanding your true take-home requires accounting for every per-transaction cost: E&O insurance, MLS fees, transaction coordinators, and marketing all add up.
Self-employment tax is often the biggest surprise for new agents. As an independent contractor, you pay both the employee and employer share of FICA — 15.3% on 92.35% of net earnings. Combined with federal and state income tax, effective tax rates often exceed 40%. Maximizing deductions through a home office, vehicle mileage, and marketing expenses is essential to keeping more of what you earn.
New agents commonly start at 50/50, meaning you keep half of your side of the commission. As you build a track record, you can negotiate better splits — 70/30, 80/20, or even 90/10 are common for top producers.
Flat-fee brokerages charge a fixed monthly or per-transaction fee instead of taking a percentage. This is advantageous for high-volume agents whose percentage split would exceed the desk fee, but risky for agents in slow months.
Franchise fees are charged by branded brokerages like Keller Williams (6% capped at $3,000 per year), Century 21, and RE/MAX. They fund corporate marketing, technology, and brand support. Caps mean high producers pay less proportionally.
Most experienced agents hire TCs at $300–$500 per deal to handle paperwork, timelines, and compliance. The time savings typically outweigh the cost — an extra $400 per deal is worthwhile if it frees you to focus on listing appointments.
A safe rule is to set aside 30–35% of every commission check for taxes. Open a separate savings account and transfer that percentage immediately after each closing. Make quarterly estimated tax payments to avoid penalties.
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