Brokerage compensation structures: the four dominant families

U.S. residential brokerage compensation falls into four dominant structures—graduated splits, cap-based models, fee-based models, and salaried W-2. The same gross-production agent can take home 1.5x to 2x different income depending on structure.

U.S. residential real estate brokerages compensate licensed agents through one of four dominant structures. Graduated splits start at a baseline (commonly 60/40 or 70/30, agent/brokerage) and step up with annual production milestones, typically capping at 80/20 or 85/15. Cap-based models use a flat split until the agent contributes a fixed company-dollar cap (commonly $16k-$22k), after which the agent retains 95-100% of subsequent commission for the remainder of the anniversary year. Fee-based or low-split models (most RE/MAX offices, certain Compass arrangements) charge fixed monthly desk fees of $500-$2,000+ in exchange for 95/5 or 100% splits. Salaried/W-2 models (Redfin) replace per-deal commission with base salary plus per-close bonus. At a constant $400k of gross production, identical agents at different brokerage structures can land anywhere from approximately $180k take-home (low-tier graduated, no cap) to $360k+ (post-cap cloud-based brokerage with sub-$10k annual fees), a roughly two-fold delta on identical work.