How it runs for real estate agents and brokerages
Agent commissions stay out of payroll and flow through disbursements. Team leaders who pay salaried assistants or licensed team members get the same split treatment. Payroll tax filings are reconciled to the ledger each quarter, and you approve every run.
What is payroll processing outsourcing?
Payroll processing outsourcing means a remote team prepares each pay run inside your payroll software: reconciling hours, entering changes, checking deductions and producing the run for the employer to approve. The employer keeps the payroll account, the bank authority and the legal responsibility. The provider posts the payroll journal and reconciles it, so payroll and the books agree.
What we handle for real estate agents and brokerages
- W-2 staff payroll inputs prepared and journal posted by office
- Licensed agents kept on 1099-NEC disbursements, outside payroll
- Production bonuses for staff calculated from closed transactions
- Team assistants and salaried team members handled by employment status
- Quarterly payroll tax filings reconciled to the ledger
The KPI that matters here
Payroll journal posted within 1 business day of each run with zero agents misclassified in payroll.
Real estate compliance notes
1099-NEC for agents and referral partners
Brokerages report commissions paid to licensed agents on Form 1099-NEC because agents who meet the IRC section 3508 tests are statutory nonemployees. Referral fees paid to other brokerages and payments to unincorporated vendors are reported the same way once they reach the annual threshold. We keep W-9s and cumulative totals current so the forms are prepared for your review and filing by the January deadline.
Commission splits and disbursement records
Each closing is documented from the settlement statement through the commission disbursement authorization to the agent payment, so the split, cap progress, franchise royalty and any referral fee are traceable. Many state commissions require these records to be retained for several years. We file the documents with the entry in LedgerDesk.
Earnest money and trust accounts
Most state real estate commissions require earnest money to be held in a separate trust account, never commingled with operating funds, with a transaction-level ledger and a monthly reconciliation. Some states require interest-bearing accounts or set deadlines for deposit and disbursement. We maintain the ledger and reconciliation; the broker signs and remains responsible under the license.
Client money in the UK, Canada and Australia
UK letting and estate agents must belong to a Client Money Protection scheme and keep client money in a separate account. Canadian and Australian agencies operate under provincial or state trust-account rules with regular reconciliation and audit requirements. We prepare the ledgers and reconciliations in the format the regulator or auditor expects.
Real estate software we work in
- QuickBooks Online
- Xero
- Gusto
- Bill.com
- Stripe
- Brokermint
- SkySlope
- dotloop
- Lone Wolf Back Office
- All 50 platforms
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Frequently asked questions
Are real estate agents employees or contractors for payroll?
Licensed agents paid substantially on sales under a written contract stating they are not employees are statutory nonemployees under IRC section 3508, so they receive 1099-NEC, not W-2. Salaried assistants, coordinators and office staff are employees. The accountant keeps the two groups in separate systems; your CPA or attorney advises on any classification question.
Can you calculate staff bonuses tied to office production?
Yes, bonus rules such as a fixed amount per closing or a percentage of company dollar are set up once, and the accountant calculates each period's bonus from posted closings. The calculation is shown to the broker with the payroll summary for approval before the run. Bonuses are posted to the office they relate to.
How do you handle payroll for a team inside a brokerage?
A team leader's licensed team members are usually paid through the brokerage's commission disbursements under their own split, while the team's salaried assistants are on the team leader's own payroll if the team is a separate entity. The accountant sets up whichever structure your agreements define and keeps commission and wages separate.
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