Setting up commissions — the ladder, your level, and where agency revenue comes from
Four steps: build the ladder, mark your agency's level on it, enter product comp, assign your reps. The concept people get wrong is where the agency's money comes from — it's the spread between levels, not a cut of the producer's commission.
Who this is for
Agency owners and whoever runs comp. Producers see the result, not this screen.
Agency revenue is the spread
This is the thing to get straight before touching anything. Your agency doesn't take a cut of what a producer earns. The carrier pays out against a contract level; your agency sits at one level on that ladder and the producer sits lower. The agency's revenue is the DIFFERENCE between those two levels on the same sale.
So raising a producer's level doesn't 'cost you a bigger cut' — it narrows your spread on their business. Same number, but thinking of it as a spread rather than a cut is what makes override maths behave.
The ladder
The ladder is the set of contract levels you work with for a line of business. Build it once per line — health and life are separate ladders because the carriers treat them separately.
Then mark which level is your agency's own. That's step 2, and it's easy to skip; without it there's no reference point to compute a spread from, so revenue numbers will look wrong rather than missing.
Overrides are a chain, not a flag
An override isn't a single 'this person gets an override' setting. It follows the upline chain: each person sits at a level, and everyone above them earns the difference between their own level and the level below. Model the chain correctly and the overrides fall out of it.
Product comp
Enter what each product actually pays at each level. This is the table everything else computes against, so an error here propagates into every revenue figure you look at.
How to check it worked
- The setup checklist at the top of the comp page shows all four steps complete — including 'Mark your agency's level', which is the one most often left undone.
- Take one real recent sale and check the computed agency revenue equals the spread you'd work out by hand.
Common mistakes
- Thinking of agency revenue as a percentage of the producer's commission. It's the spread between contract levels.
- Building the ladder but never marking the agency's own level, so there's nothing to compute a spread against.
- Assigning reps before entering product comp — the assignment is fine, but every number stays empty until the rates exist.
Related
Where this lives in the app
This is documentation for Virtual Closer. Book a walkthrough or sign in.