What a commission draw is
A draw is a set amount your employer pays you each pay period before your commission is known, so you have steady income while deals are still closing. It's common for new reps, during a ramp, and in commission-only roles. The big question is whether it's recoverable.
Recoverable draw
An advance against future commission. If you earn less than the draw, the difference is added to a balance you owe. When commission later beats the draw, the extra pays that balance down first, and only then reaches your check.
Non-recoverable draw
A guaranteed minimum. If commission is lower, you keep the draw and owe nothing. If it's higher, you're paid the commission.
Worked example
A $3,000 monthly draw while a new rep ramps. Commission earned is $1,000, $2,000, $2,500, $4,500, $6,000 and $5,000 over six months ($21,000 total).
| Month | Commission | Recoverable paid | Owed after | Non-recov. paid |
|---|---|---|---|---|
| 1 | $1,000 | $3,000 | $2,000 | $3,000 |
| 2 | $2,000 | $3,000 | $3,000 | $3,000 |
| 3 | $2,500 | $3,000 | $3,500 | $3,000 |
| 4 | $4,500 | $3,000 | $2,000 | $4,500 |
| 5 | $6,000 | $4,000 | $0 | $6,000 |
| 6 | $5,000 | $5,000 | $0 | $5,000 |
| Total | $21,000 | $21,000 | $0 | $24,500 |
The recoverable draw smoothed the rep's income but paid exactly what was earned. The non-recoverable draw paid $3,500 more, because the early slow months were never clawed back.
Questions to ask about a draw
- Is it recoverable or non-recoverable? It's sometimes recoverable only within a quarter, then forgiven.
- How long does it last? Ramp draws usually end after 3–6 months.
- What happens to a balance if you leave? Some plans forgive it, others ask for repayment. Get it in writing.
- Does an unpaid balance roll into next year?
FAQ
What is the difference between a recoverable and non-recoverable draw?
A recoverable draw is an advance: if your commission is lower than the draw, you owe the difference back out of future commission. A non-recoverable draw is a guaranteed minimum that you keep even if your commission never catches up.
How is a recoverable draw paid back?
When a month's commission is higher than the draw, the extra goes toward the balance you owe first. You only see commission above the draw once the balance is cleared.
Do I have to repay a draw if I quit?
It depends on your comp plan and local law. Some plans forgive the balance, others ask for repayment. Check the plan document and ask HR before you sign.
Is a draw the same as a base salary?
No. A base salary is paid no matter what. A draw is tied to commission: recoverable draws are advances against it, and non-recoverable draws are a minimum commission payment.