What happens to commission when a rep leaves?
Three questions come up every time a commission-paid rep leaves:
- What is paid during the notice period?
- Who gets commission on deals that close after the rep has left?
- What happens to a draw the rep has not yet earned back?
1. Commission during the notice period
A salaried employee is entitled to pay during notice, also on garden leave. Under section 9(3) of the Danish Salaried Employees Act (funktionærloven), commission is based on what the rep would probably have earned. A rep on garden leave should not lose commission just because they are no longer allowed to sell.
2. Deals that close after the rep leaves
For reps who are travelling salespeople (handelsrejsende) paid wholly or partly by commission, section 33 of the Danish Commercial Agents Act (handelsagentloven) applies the Act's agent rules. Under section 10, there is a right to commission on deals concluded after termination if the deal was mainly brought about by the rep's work and is concluded within a reasonable time.
Many commission agreements regulate this themselves, for example with a fixed period. Write it down, and be precise about when a deal counts as "brought about".
| Situation | Typical rule in the agreement |
|---|---|
| Deal closed before leaving, invoiced after | Commission paid in the next payroll run |
| Late-stage deal at departure, closes within e.g. 3 months | Commission to the departed rep, in full or shared |
| Early lead, closes after 6 months | Commission to the new account owner |
3. Draws and negative balances
Under section 9(2) of the Salaried Employees Act, an advance on commission can only be covered by salary or commission owed. It cannot be reclaimed as an ordinary debt. If a rep has a negative balance on a draw against commission when they leave, the company can normally only offset it against amounts already due.
Bonuses are different
Bonuses and similar payments follow section 17a: a salaried employee who leaves during a financial year is entitled to a pro rata share. See bonus scheme.
Example
A rep is dismissed with 3 months' notice and put on garden leave. Average commission over the last 12 months is DKK 15,000 a month. A DKK 400,000 deal the rep drove closes 5 weeks after departure. The agreement gives post-termination commission of 8% for 3 months.
| Item | Amount |
|---|---|
| Commission during notice (3 × DKK 15,000) | DKK 45,000 |
| Post-termination commission (8% of DKK 400,000) | DKK 32,000 |
Departures in Prowi
Prowi tracks every deal from CRM to payroll. When a rep leaves, you see which deals are still open, who owns them, and what belongs on the final statement.
Prowi is not a law firm. This page describes the general Danish rules; collective agreements and individual contracts can give other rights. Talk to your employers' association or a lawyer when money is at stake.
In Prowi
Every term on this page is a rule you can write into a commission model in Prowi. The model reads the deal from HubSpot the second it closes, applies the rule, and the rep sees the result on their phone before the day is over.