Recoverable Draw

A recoverable draw is a way for employees to withdraw from their future commissions to maintain a more regular income.

For example, employee Xu is entitled to a recoverable draw of $1,000 per commission period. Xu earns $1,000 in commissions during that period and uses their full draw amount of $1,000 to take a total variable compensation payment of $2,000.

Next month, Xu earns $3,000 in sales commission and has to repay the $1,000 drawn from the previous period, so Xu still only takes home $2,000 that period.

If Xu only earned $2,500 in commission the next period, their employer will take collect the remaining $500 in the next pay period.

There are no set terms for recoverable draws. These are determined by the employer and laid out in the employee’s contract.

Click here to learn more about recoverable and non-recoverable draws.