1. Build a transaction-level commission ledger
For each order, record the customer and contract reference, employee contribution, signing and delivery dates, acceptance, invoice, actual receipts, returns or cancellations, applicable rate, calculation base and previous payments. Identify whether the plan rewards obtaining an order, completed delivery, collected revenue, gross margin or a team target. These are possible contractual measures, not statutory default formulas. Do not substitute an accounting accrual or a manager’s approval status for the underlying entitlement analysis.
Preserve the version of the employment contract, commission plan and amendments applicable when the work was done. Compare the China documents, any headquarters plan and actual calculation records. Articles 29 and 30 of the Labor Contract Law require contractual performance and timely, full remuneration under the contract and national rules. A label such as discretionary incentive does not by itself remove an agreed payment obligation.
2. Examine collection and departure conditions separately
If the company relies on customer collection, establish the exact clause, whether collection is an entitlement condition or merely a payment milestone, the employee’s responsibilities and the actual collection history. Assess the clause’s legality and reasonableness in the local context; do not assume every collection condition is valid or every such condition is invalid. If the money arrived after departure, trace it back to the relevant order and work. A later receipt does not, by itself, make the commission disappear.
A rule requiring employment on the payout date needs a separate review of its content, procedure and relationship to the contract. Article 4 addresses remuneration rules, democratic discussion and consultation, and publication or notification. Interpretation (I) on Labor Disputes, Article 50, also addresses lawful published rules and the priority of inconsistent contract terms when requested by the employee. Do not retrospectively add a forfeiture condition to completed work or treat a handbook receipt as agreement to reduce contractual pay.
3. Settle what is due and document what remains unresolved
Article 9 of the Interim Provisions on Wage Payment requires wages to be paid in full when the parties lawfully terminate or end the employment contract. Article 7 addresses agreed pay dates, and Article 6 requires written payment records, kept for at least two years, and an individual wage statement. Check applicable local payment rules as well. Do not withhold already-due commission because another order is disputed, headquarters has not approved the budget or a later payroll run is more convenient.
For an item whose entitlement or amount genuinely cannot yet be determined, specify the order, unresolved fact, supporting documents, responsible reviewer, communication method and next review date. This is a reconciliation process, not permission to extend a statutory deadline. Any later payment arrangement needs a lawful basis and a specific review of the terms and facts; calling a payable amount pending reconciliation does not change its status. Do not invent an after-exit service or collection duty merely to keep an existing commission unpaid.
4. Retain the records that survive account closure
Before disabling access, lawfully preserve relevant CRM history, original order records, customer receipts, credit notes, commission calculations, prior approvals and payroll evidence. Record who exported the data and how it connects to the finance records. Article 6 of the Labor Dispute Mediation and Arbitration Law requires employers to produce relevant evidence they hold or manage, with adverse consequences for failure. Interpretation (I), Article 44, puts the burden on employers for disputes arising from their decisions to reduce remuneration.
If several salespeople worked on an order, preserve the contemporaneous allocation rule and each person’s contribution. Reassigning the customer to a successor is not itself proof that the predecessor’s entitlement has ended. Explain genuine corrections or returns using the operative terms and records, rather than rewriting the historic ledger. Keep any alleged employee-caused loss separate from commission entitlement; a disputed loss does not automatically authorize a payroll offset.
5. Give a reasoned settlement response
Provide an itemized calculation showing what has been paid, what is due and the reasons and evidence for each disputed item. If negotiating an exit settlement, address the listed orders, covered period and any unresolved future receipts explicitly. Interpretation (I), Article 35, recognizes qualifying settlement agreements but excludes violations of mandatory law and fraud, coercion or exploitation of distress; material mistake or manifest unfairness may support revocation. A generic all-settled signature is not a substitute for checking these conditions.
Calendar claim risk before closing the file. Article 27 of the Labor Dispute Mediation and Arbitration Law sets a general one-year period, with interruption, suspension and special rules for wage arrears during employment; after termination, that wage-arrears provision requires a claim within one year of termination. Check classification, due dates, demands and acknowledgements, especially for later receipts. Under Interpretation (II), Article 20, failure for one’s own reasons to raise limitation during arbitration generally prevents raising it in court, subject to its new-evidence exception. For initial advice, provide a non-confidential outline of the China employer, city, plan, exit date and disputed orders; detailed personnel and customer records should follow an agreed secure process. Consultations are in Chinese and English.
Legal sources
Official sources · Checked 2026-10-24. Translations are for reference and are not official legal texts.
- PRC Labor Contract Law (2012 amendment) ↗
Articles 4 and 29–30: remuneration rules, contractual performance and timely full pay.
- Interim Provisions on Wage Payment, Lao Bu Fa [1994] No. 489 (Shanghai HRSS republication) ↗
Articles 6–7 and 9: payment records, pay dates and settlement on termination.
- PRC Labor Dispute Mediation and Arbitration Law ↗
Articles 6 and 27: employer-held evidence and limitation rules, including exceptions.
- SPC Interpretation (I) on Labor Disputes, Fa Shi [2020] No. 26 ↗
Articles 35, 44 and 50: settlement validity, employer burden and rules versus contracts.
- SPC Interpretation (II) on Labor Disputes, Fa Shi [2025] No. 12 ↗
Articles 20–21: limitation defenses and the interpretation effective from 1 September 2025.
General information about mainland China. The facts, applicable dates and local rules require individual review.
Partner, Beijing ChangAn Law Firm
China-qualified since 2019 · Beijing & Shenzhen
Review an employee commission settlement
Check the commission terms, order ledger and proposed payment response before closing the employee’s account.
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