Transaction Coordination

Real Estate Commission Split Structures, Explained

How a real estate commission split works at each level, the main agent-to-brokerage models (fixed, graduated, capped, 100% with fees), team and referral splits, worked examples, and how the split reaches the closing agent on a CDA.

Ijharul Islam October 21, 2026 9 min read

A real estate commission split is how a commission is divided: first between the listing and buyer brokerages, then between each brokerage and its agent. The common agent models are a fixed split (70/30 pays the agent $7,000 of a $10,000 commission), a graduated split, a capped split, and 100% commission with flat fees.

More on this topic: TC and brokerage operations, every guide in one place.

Every number in the examples below is illustrative: splits, caps and fees are set by each brokerage's agreement with its agents, and commissions are negotiable. We explain each model, run the same agent through three of them, cover team and referral splits, and show how the final split gets to the closing agent on a commission disbursement authorization (CDA).

Key takeaways

There are two splits on most deals: brokerage to brokerage, then brokerage to agent (and sometimes team leader to team member).
Fixed splits are simple; graduated and capped splits reward production; 100% models swap the split for monthly and per-deal fees.
Compare models on a full year's numbers, not one deal: the cheapest model at 6 deals is not always the cheapest at 24.
Since August 17, 2024, offers of buyer-broker compensation can't be made on an MLS, and buyer agents working through an MLS need a written agreement before touring, per NAR.
Whatever the model, the final per-deal numbers go on the CDA, which must match the final price and every fee.

How is a real estate commission split?

A real estate commission is split in layers, and each layer is set by a different agreement. The listing agreement sets what the seller pays; any compensation to the buyer's brokerage is agreed separately (more on that below); each brokerage then splits its side with its agent under their independent contractor or employment agreement.

Gross commission for your side, from the listing agreement or the buyer agreement.
Off the top, where they apply: a referral fee to another brokerage, and a franchise fee if the brokerage is a franchise.
Brokerage and agent split of what's left, under one of the models below.
Team split, if the agent is on a team.
Per-deal fees charged to the agent, such as a transaction fee, and any TC fee paid at closing.

The order matters. On a $10,000 commission, a 25% referral fee taken off the top before a 70/30 split costs the agent $1,750; the same $2,500 taken entirely from the agent's share costs them $2,500. The agreement should say which applies.

What are the common commission split structures?

Model	How it works	Illustrative example	Often suits
Traditional (fixed) split	Agent keeps the same share of every commission	70/30: agent keeps $7,000 of $10,000	Newer agents who want training, leads and office support
Graduated split	Agent's share rises as year-to-date production passes set tiers	60% to $50,000 GCI, 70% to $100,000, 80% above	Growing agents at full-service brokerages
Capped split	Agent pays the split until the brokerage has received a set amount for the year, then keeps 100% less smaller fees	80/20 until the brokerage has $15,000, then $250 per deal	Steady producers who will hit the cap
100% commission	Agent keeps the whole commission and pays fixed fees instead	$500 a month plus $400 per deal	Experienced, self-sufficient agents
Team split	The team leader takes a share of the agent's portion, often more on leads the team supplies	50/50 on team leads, 80/20 on the agent's own	Agents who want leads and support from a team
Referral fee	A share of the gross commission paid to the brokerage that sent the client	25% of the side's gross commission	Out-of-area or retired-license referrals, where state law allows

GCI means gross commission income: the commission before the split. All figures are made up for the examples; your brokerage's agreement controls.

How does a 70/30 commission split work?

In a 70/30 split the agent keeps 70% of their side's commission and the brokerage keeps 30%. Worked example, with made-up numbers:

Line	Amount
Sale price	$400,000
Commission for this side (2.5%)	$10,000
Brokerage share (30%)	$3,000
Agent share (70%)	$7,000
Less transaction fee charged to the agent	−$395
Agent's net from this deal	$6,605

If a 25% referral fee comes off the top first, the side's commission becomes $7,500 before the split, and the agent's 70% is $5,250 before fees. The free real estate commission calculator runs this for any price: each side's commission as a percentage or flat fee, then the referral, your split and deal fees down to your net.

How does a graduated commission split work?

A graduated split raises the agent's share as their year-to-date production passes set tiers, and usually resets each year. Example tiers: 60% up to $50,000 GCI, 70% from $50,000 to $100,000, 80% above that.

An agent with $45,000 GCI so far this year closes a deal with a $10,000 commission. If the brokerage applies tiers to the portion in each tier, $5,000 is paid at 60% ($3,000) and $5,000 at 70% ($3,500), so the agent keeps $6,500. If it applies the tier in force when the deal closes to the whole commission, the agent keeps $6,000. Ask which rule your agreement uses, and whether the tiers count GCI or the brokerage's share (“company dollar”).

What is a commission cap in real estate?

A commission cap is the most the brokerage collects from an agent's splits in a year; after the cap, the agent keeps 100% of each commission, usually less a smaller per-deal fee. Caps run on a calendar year or the agent's anniversary year, depending on the brokerage.

Example with an 80/20 split and a $15,000 cap: an agent who has already paid $13,500 toward the cap closes a $10,000 commission. 20% would be $2,000, but only $1,500 is left before the cap, so the brokerage takes $1,500 and the agent keeps $8,500. Every deal after that pays only the post-cap fee, say $250. To see where your own cap falls, the free commission split calculator runs a year of deals one by one and shows the deal where you cap and what you keep from each.

Which split model pays an agent more?

It depends on volume. Here's the same agent, at $10,000 GCI per deal, under three made-up models: a 70/30 fixed split; an 80/20 split with a $15,000 cap and $250 per deal after the cap; and a 100% model at $500 a month plus $400 per deal.

Deals a year (GCI)	70/30: agent keeps	80/20 capped: agent keeps	100% with fees: agent keeps
6 ($60,000)	$42,000	$48,000	$51,600
12 ($120,000)	$84,000	$104,000	$109,200
24 ($240,000)	$168,000	$221,000	$224,400

On these numbers the 100% model keeps the most at every volume, but the table leaves out what the agent gets for the split: leads, training, marketing, office space, errors and omissions insurance and transaction support. A newer agent closing 6 deals with brokerage leads may be better off at 70/30 than paying for all of that themselves.

How do team splits and referral fees work?

On a team, the brokerage usually takes its split first and the team leader then splits the rest with the team member, often at a better rate for the agent's own leads than for leads the team supplies. Some brokerages pay the team leader and let the leader pay the members. Either way, write down which leads count as whose before the first deal closes.

Referral fees are normally paid broker to broker, under a written referral agreement that sets the percentage. Only pay people the law allows: Colorado, for example, lists paying a commission to anyone not licensed as a broker there as grounds for discipline, with limited exceptions such as a share paid to a broker licensed in another state or country. Check your state's rule before paying any referral.

How did the 2024 NAR settlement change commission splits?

The NAR settlement changed how buyer-side compensation is agreed, not how a brokerage splits with its agents. According to NAR, practice changes took effect on August 17, 2024: agents working with buyers through an MLS must have a written agreement before touring a home, stating compensation in an objective amount or rate (not “whatever the seller offers”), with a statement that commissions are fully negotiable and not set by law. Offers of compensation are no longer allowed on MLS platforms, though sellers can still offer compensation off the MLS and can offer buyer concessions on it.

For the back office, that means the buyer side's gross commission now comes from the buyer agreement and whatever the parties negotiate, so confirm the final figure from the executed documents before you work out the split.

Who records the split, and how does it reach closing?

The brokerage records each deal's split on the commission disbursement authorization (CDA), which the broker signs and sends to the title company, escrow company or closing attorney before closing. It lists the gross commission, each payee in order and the brokerage's remainder. See how a CDA works, and commission disbursement software if you need year-to-date cap and tier tracking.

In Closingbird, the transaction's Commission card takes your side's commission as a percentage of price or a flat amount, then payees in order (referral fee, franchise fee, agent split, team split, TC fee, transaction fee or other), each as a percentage of gross or a flat amount. Create CDA makes the PDF on the file and you email it to escrow; when the money arrives you mark it received. Work out where the agent stands on a cap or tier first, then enter the resulting split. Steps are in Commission and the CDA.

Frequently asked questions

What does a 70/30 commission split mean?

The agent keeps 70% of their side's commission and the brokerage keeps 30%. On a $10,000 commission that's $7,000 to the agent and $3,000 to the brokerage, before any referral, franchise or transaction fees.

What is a capped commission split?

A split the agent pays only until the brokerage has received a set amount for the year (the cap). After that the agent keeps 100% of each commission, usually less a smaller per-deal fee, until the cap year resets.

Is a 100% commission brokerage worth it?

It usually pays more per deal at any steady volume, but the agent pays monthly and per-deal fees and typically gets fewer leads, less training and less support. Run a full year of your own numbers through each model before switching.

Does a referral fee come off the top?

Usually it's paid from the side's gross commission before the agent split, but it depends on the brokerage agreement and the referral agreement. Check which applies, because it changes the agent's net.

Do sellers still pay the buyer's agent after the NAR settlement?

They can. NAR says sellers can still offer compensation off the MLS and can offer buyer concessions on it, but buyer agents working through an MLS need a written agreement with the buyer stating their compensation, and all fees are negotiable.

Run it in Closingbird

Record each deal's split and payees on the file, generate the CDA as a PDF and track what's received. Start a free trial (14-day free trial, no credit card required) or see pricing.

Sources

Checked in October 2026. Rules and prices change, and many vary by state, so confirm with the source, your state's real estate commission or your broker before you rely on them.

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