"Compensation Agreement Template"

What Is a Compensation Agreement?

A Compensation Agreement is a legal document that guarantees that an individual will receive compensation for certain actions. It can include compensation for an individual getting paid as an employee, a commission that a worker is entitled to receive, compensation for a Non-Compete Agreement, etc.

Alternate Name:

  • Agreement for Compensation.

The purpose of the agreement is to put into writing all of the details about the compensation payment and any changes to it and to secure the position of the employee and the company. Thus, when an employee's payday comes there won't be any questions or confusion about the amount of money an employee is supposed to receive.

A contract closely related to this one is called a "Deferred Compensation Agreement." It is a legal contract upon which the parties come to an arrangement that a portion of an employee's payment will be transferred later than the day it was earned.

You can download a Compensation Agreement template through the link below or create your own document with our online form builder.

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How to Write a Compensation Agreement?

A standard Compensation Agreement consists of several parts, which include the following:

  1. Introduction. In the first part of the contract, a filer should state the full names of the parties.
  2. General terms. For the sake of the agreement, an applicant should give definitions to the most used terms in the document.
  3. Background information. Here parties should explain what this compensation agreement is connected with or list any document that defines the relationship between the parties involved. For example, an employment contract.
  4. Payment terms. In this part of the document, a filer must describe all of the things connected with payment in great detail. The amount of it, hourly wage, when or how often it will be paid, will there be any deductions, if it's taxable, etc. The more thorough it will be, the fewer questions it will cause.
  5. Amendment and termination of the agreement. The parties should agree on the terms of the amendments and termination of this agreement as well.
  6. Signatures. In the last part of the contract, the involved parties designate their will and intention to obey the agreement by signing it.

The parties can also include other sections in the document, such as dispute resolution, governing law, severability, etc.

What Is a Compensation Agreement in Real Estate?

Compensation Agreements are not only used for employment but in other areas as well. One of the most common uses of them is in the real estate market. Among the many variants, the most popular ones are:

  • A compensation agreement signed between a homeowner and a broker, upon which a broker is entitled to receive compensation for finding a buyer and closing a deal;
  • A compensation agreement signed between a buyer and a broker, upon which a broker is entitled to receive compensation for finding a property and closing the deal.

In those cases, the structure of the document will slightly differ from the standard compensation agreement, however, all the main elements will remain, but will be accompanied with a few additional elements.


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Compensation Agreement
This ​ C ompensation Agreement ​ ( hereinafter referred to as the “Agreement”) is entered
into as of _________________ by and between _________________________, with a
mailing address of ________________________________________________________
(hereinafter referred to as the “Employer”) and _________________________, with a
mailing address of ________________________________________________________
(hereinafter referred to as the “Employee”), collectively referred to as the “Parties,” both
of whom agree to be bound by this Agreement.
WHEREAS the Employer desires to retain the services of the Employee, and the
Employee desires to render such services, these terms and conditions are set forth.
IN CONSIDERATION of this mutual understanding, the Parties agree to the
following terms and conditions:
1. Employment. The Employee agrees that they shall faithfully and to the best of their
ability carry out the duties and responsibilities communicated to them by the Employer.
The Employee shall comply with all company policies, rules, and procedures at all times.
2. Position. ​ A s a _________________, it is the duty of the Employee to perform all
essential job functions and duties. From time to time, the Employer may also add other
duties within the reasonable scope of the Employee’s work.
3. Compensation. ​ A s compensation for the services provided, the Employee shall be
paid a wage of $_________________ per _________________ and will be subject to a
_________________ performance review. All payments will be subject to mandatory
employment deductions (Social Security, Medicare, State, and Federal taxes).
4. Benefits. ​ T he Employee has the right to participate in any benefits plans offered by the
Employer. The Employer currently offers the following benefits:
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
List of benefits, if applicable
© ​
T EMPLATEROLLER.COM
Compensation Agreement
This ​ C ompensation Agreement ​ ( hereinafter referred to as the “Agreement”) is entered
into as of _________________ by and between _________________________, with a
mailing address of ________________________________________________________
(hereinafter referred to as the “Employer”) and _________________________, with a
mailing address of ________________________________________________________
(hereinafter referred to as the “Employee”), collectively referred to as the “Parties,” both
of whom agree to be bound by this Agreement.
WHEREAS the Employer desires to retain the services of the Employee, and the
Employee desires to render such services, these terms and conditions are set forth.
IN CONSIDERATION of this mutual understanding, the Parties agree to the
following terms and conditions:
1. Employment. The Employee agrees that they shall faithfully and to the best of their
ability carry out the duties and responsibilities communicated to them by the Employer.
The Employee shall comply with all company policies, rules, and procedures at all times.
2. Position. ​ A s a _________________, it is the duty of the Employee to perform all
essential job functions and duties. From time to time, the Employer may also add other
duties within the reasonable scope of the Employee’s work.
3. Compensation. ​ A s compensation for the services provided, the Employee shall be
paid a wage of $_________________ per _________________ and will be subject to a
_________________ performance review. All payments will be subject to mandatory
employment deductions (Social Security, Medicare, State, and Federal taxes).
4. Benefits. ​ T he Employee has the right to participate in any benefits plans offered by the
Employer. The Employer currently offers the following benefits:
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
List of benefits, if applicable
© ​
T EMPLATEROLLER.COM
Access to these benefits will only be possible after the probationary period has passed.
5. Probationary Period. ​ I t is understood that the first __________________________ of
employment constitutes a probationary period. During this time, the Employee is not
eligible for paid time off or other benefits. During this time, the Employer also exercises
the right to terminate employment at any time without advance notice.
6. Paid Time Off. ​ F ollowing the probationary period, the Employee shall be eligible for
the following paid time off:
____________________________
____________________________
Vacation
Sick leave and personal days off
The Employer reserves the right to modify any paid time off policies.
7. Termination. It is the intention of the Parties to form a long and mutually profitable
relationship. However, this relationship may be terminated by either party at any time
provided _________________ written notice is delivered to the other party.
The Employee agrees to return any Employer property upon termination.
8. Non-Competition and Confidentiality. The Employee may have access to
confidential information that is the property of the Employer. The Employee is not
permitted to disclose this information outside of the Employer’s company.
While working for the Employer, the Employee may not engage in any work for another
employer that is related to or in competition with the Employer’s business.
The Employee is permitted to seek other employment provided that:
● It does not detract from their ability to fulfill their duties;
● The Employee is not assisting another organization in competing with the
Employer.
Upon termination, the Employee shall not solicit business from any of the Employer’s
clients for a period of at least _________________.
9. Entire Agreement. This contract represents the entire agreement between the Parties
and supersedes any previous written or oral agreement. This agreement may be modified
at any time, provided the written consent of both the Employer and the Employee.
© ​
T EMPLATEROLLER.COM
12. Legal Authorization. ​ T he Employee agrees that they are fully authorized to work in
the United States and can provide proof of this with legal documentation.
13. Severability. The Parties agree that if any portion of this contract is found to be void
or unenforceable, it shall be struck from the record and the remaining provisions will
retain their full force and effect.
14. Governing Law. The Parties agree that this Agreement shall be additionally
governed by the laws of ______________________.
State
The Parties agree to the terms and conditions set forth above as demonstrated by their
signatures as follows:
EMPLOYER
EMPLOYEE
Name: _____________________
Name: _____________________
Signed: ____________________
Signed: ____________________
Date: ______________________
Date: ______________________
© ​
T EMPLATEROLLER.COM
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