How agency commissions actually work
Who takes a cut, who pays it, and the questions to ask before you sign anything.
Commission is simple in principle and confusing in practice, because two different arrangements use the same word. Knowing which one you are in tells you what you actually earn from a booking, which is a strange thing to be unsure about.
Deducted from you, or added to the client
In the first arrangement, the client pays a fee and the agency keeps a percentage before paying you. Your rate and the client's cost are the same number, and the commission comes out of your side.
In the second, the agency adds its fee on top of your rate. You receive what you quoted and the client pays more than that. Both are normal. What is not normal is not knowing which one applies to you.
Rates vary, and anyone quoting a universal number is guessing
Percentages differ by market, category, and how much the agency actually does. Rather than anchor on a number you read somewhere, ask what the rate is, what it covers, and whether it changes for repeat clients.
The important comparison is not the percentage in isolation. A higher rate from someone who brings you consistent work is better than a lower rate from someone who brings you nothing.
Where splits get complicated
More than two parties often have a claim: a mother agency, a booking agency in another market, or whoever referred the job. Each may take a share, and they are usually taken in sequence rather than all from the original total.
Ask for the arithmetic on a real example rather than the policy in the abstract. A worked example of a job at a specific price surfaces assumptions that a percentage on its own hides.
What to confirm before you sign
Four things: the percentage, whether it is deducted or added, when you get paid relative to when the client pays, and what happens if the client pays late or not at all.
That last one matters more than people expect. Some arrangements pay you on client payment, others on a fixed schedule regardless. The difference decides who carries the risk of a slow client.
- Who pays the commission, me or the client?
- It depends on the arrangement. It is either deducted from your fee or added to the client's cost. Confirm which one before you agree to anything.
- What is a normal commission rate?
- It varies by market, category and how much the agency does. Ask what the rate is and what it covers rather than relying on a figure quoted elsewhere.
- Can more than one party take a cut?
- Yes. A mother agency, a booking agency and a referrer can all have a claim. Ask for the arithmetic on a real example.
- Does Tulala take a commission?
- The free workspace plan takes no commission on bookings. See the pricing page for what each plan includes.
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