TN 8 (11-93)
RS 01401.160 Commissions
Commissions are wages when paid if the payment stems from an employer-employee relationship (see RS 02101.115). The wages of a salesperson paid on a straight commission basis are the gross commissions paid minus any amounts paid specifically as advances or reimbursements for travel or business expenses incurred in the employer's business (see RS 01401.360). Advances against commissions to be earned in the future are wages when paid.
2. Commissions Paid by a Third Party
Commissions paid, whether directly or through an agent, by a manufacturer to salespersons employed by a retail dealer are wages. These payments are part of the employment relationship and are additional wages for social security purposes.
3. Renewal Commissions
Renewal commissions to life insurance agents on life insurance policies are wages when paid if the policy was written when the agent was:
The employee status at the time of the original sale determines whether the renewal commissions are wages even if the salesperson has retired or otherwise ended the employment relationship.
Renewal commissions paid on any type of insurance other than life insurance are wages if the agent was an employee rather than self-employed at the time of renewal.