Override Commission
An override commission is additional compensation paid to managers based on their team's sales performance.
Think of it as a 'management fee' that rewards leaders for developing and supporting their team's success.
Why does this matter?
Override commissions align leadership incentives with team performance. They encourage managers to invest time in training, mentoring, and supporting their agents rather than just focusing on their own sales.
Without overrides, experienced agents have little financial incentive to move into management roles.
How it works:
When an agent under supervision makes a sale, their manager receives a small percentage (typically 1-5%) of that agent's commission as an override.
The agent still receives their full commission. The override comes from the agency's portion or is built into the commission structure. It's not taken from the agent's earnings.
You'll encounter override commissions in team-based agencies where experienced agents manage newer agents, in situations where agency owners want to reward top performers who help train others, and in multi-level agency structures where regional managers oversee local teams.
The biggest pitfall?
Creating too many levels or making the percentages too high. This can eat into profitability and create tension between agents and management.
Example:
Jennifer manages a team of 5 newer life insurance agents at her agency. She receives a 3% override on all their sales while still earning her full commission on her own direct sales. Last month, her team sold $2 million in policies, generating $100,000 in total team commissions. Jennifer receives $3,000 (3% of $100,000) as her override, rewarding her for the time she spends coaching her team members, reviewing their proposals, and helping them close difficult cases. This motivates her to continue developing her agents rather than hoarding leads for herself.
How Earn Base Helps
Automatically tracks team hierarchies and calculates override commissions with complete transparency, showing both managers and agents exactly how overrides are earned and distributed.