Samantha McLean. Photo: Supplied

Commission is the structure that shapes almost everything about how real estate operates in Australia – who enters, who survives, who earns, and how customers are served. But what if it’s not the only option? In this three-part series, Elite Agent Managing Editor Samantha McLean draws on her own career in salaried tech sales, plus academic research and industry data to ask the question the industry hasn’t properly explored: what would actually change if agents were paid differently?

In 1995, I was a junior comms consultant at BT, selling frame relay solutions – corporate Wide Area Networks, managed voice and data services, the kind of infrastructure that connected offices across the country. I was 25, salaried, earning about $80,000 a year including bonus.

I had named accounts. I had a manager whose job was to make me better at mine.

I had super, leave, training, and a team around me.

There were office friendships, office marriages, and office divorces. It was a workplace, with all that comes with it.

By 2000, I was at Cisco, selling networking equipment, on a base of $80,000 plus an $80,000 bonus for meeting a rather hefty sales target – around $300,000 in today’s money.

In telco and tech, you tend to specialise. You’d cover a vertical – media companies, or financial services – and over time, you understood the client’s world almost as well as they did.

The salaried structure enabled that depth, because you weren’t chasing every possible lead across every possible industry. You went deep, not wide.

Today, the median Australian real estate agent earns $69,157.

And that number – from the ATO’s own taxation statistics, drawn from 76,292 lodged tax returns – is taxable income, after deductible expenses have been claimed. Car, phone, marketing, portal listings, photography, signage, CRM subscription, desk fees – all of that comes off before the ATO number is struck.

Before income tax, yes, but after the direct costs of doing the job. And for the many agents working commission-only, there’s no super, no leave, no sick pay on top of it.

The salaried property manager working at the same agency, often at the next desk, earns a similar number – but with 11.5% super on top, with leave, with sick pay, with training funded by the employer.

The real gap is wider than it looks.

I’ve been thinking about this a bit more lately. The skill sets overlap more than either industry would admit – persuasion, relationship management, technical product knowledge, reading a room, closing. If anything, the emotional complexity of real estate is higher. You’re not selling a router. You’re managing the sale of someone’s family home, sometimes in the middle of a divorce or a death or a financial crisis nobody in the room wants to name.

That’s harder, not easier.

So why does one job come with a base salary, superannuation, leave, a team, and a career pathway – and the other comes with none of that?

I genuinely don’t know. Sometimes I wonder why I left the salary myself. Then I remember I might have the entrepreneurial identity myself – the one this piece is about to complicate.

So, this series is my attempt to follow the question honestly and see where it goes.

Where this is going

After “The Mirror Has Many Faces” ran last month, and the response series that followed, the thread that kept surfacing – in conversations, in emails, in a short exchange with Leanne Pilkington that might lead to a longer one – was compensation. Specifically, Gross Commission Income – the structure where agents are paid a percentage of the sale price, which shapes almost everything else about how the industry operates.

A single comment from Leanne got me thinking. The responses to the Mirror confirmed the industry feels the tension. This series is the follow-through.

Three parts, because every time I pull a thread on this question, I end up down a new rabbit hole. So:

  • Part 1 – the one you’re reading – asks who the current system actually works for.
  • Part 2 follows the money: franchises, portals, Vendor Paid Advertising, mortgage referrals, and what moves when you pull the GCI thread.
  • Part 3 asks what the alternative looks like in a world where AI is compressing the cost of some of the things agents currently get paid to do.

I’m not here to change minds. I’m here to open them – including my own. Commission genuinely works for some people. Salary has its own problems. The international evidence is messy. If you’re reading this hoping for a hero or a villain, you’ll be disappointed.

If you’re curious, though, strap yourself in, and read on.

The research says alignment is weaker than the industry claims

In 2008, Steven Levitt – the Freakonomics economist – and Chad Syverson published a study that real estate has never quite managed to shake off.

They looked at more than 100,000 home sales in Cook County, Illinois, and compared what happened when agents sold clients’ homes versus when they sold their own.

The finding: agents selling their own homes waited 9.5 days longer and sold for 3.7% more.

Rutherford, Springer and Yavas replicated it with a separate dataset and found a 4.5% premium. Two research teams, two datasets, same direction.

The economics of it are straightforward. An agent earning 2% commission on a $1 million sale gets $20,000. If they push the price up another $50,000 – which might mean another fortnight of opens, another round of buyer negotiations, the risk of the deal falling apart entirely – they earn an extra $1,000.

A week’s work for $1,000 when you’ve got three other listings to service is not a rational trade. So the rational move, for the agent, is to counsel the vendor to accept the solid offer now.

When the agent owns the home, that maths inverts completely. Suddenly the extra fortnight is worth it.

These studies are US data, and the Australian market isn’t identical – our commission rates are lower, auction culture compresses the negotiation window differently, and the agent’s share varies depending on their split with the agency.

But the incentive structure points in the same direction.

It’s worth noting that many of the best Australian agents already know this about themselves. They won’t sell their own home – they’ll tell you they’re too close to it and they’d rather have someone neutral negotiate on their behalf.

Which only adds to the idea that agents can’t be neutral about their own property. The research puts numbers on something the industry already feels.

The industry’s pitch is that commission aligns everyone’s interests – I do well when you do well. Levitt’s research suggests it’s not that simple.

The structural flaw

Here’s what baffled me when I moved from tech into real estate media.

In enterprise sales – telco, SaaS, pharma, professional services – there were rules around account ownership. Not perfect rules. I had plenty of managers who stuck their nose into a “must-win” deal – sometimes helpful, sometimes not.

I fought co-workers over accounts where we’d both surfaced an opportunity on the same account. It was messy. But there was infrastructure to manage the mess: accounts locked in CRM, deal registration that timestamped who found the lead first, origination credit that survived team changes, escalation paths, someone to arbitrate.

Real estate has some of this. Farm areas exist, but they vary from place to place and are somewhat unenforceable. A junior agent can work a vendor for months and lose them to the principal at a Saturday open. The person whose job is supposedly to develop you is also the person with the strongest incentive to take your best listing. There’s no CRM lockup, no escalation path, no neutral arbiter.

In tech, your manager’s bonus was tied to your success. The incentive was to mentor, not to compete. With some exceptions, in real estate, the incentive structure runs the other way – and the industry has never built the systems to counterbalance it.

But – commission isn’t just a pay structure. It’s an identity.

This is a big “but” – and the part the economics misses.

Self-determination theory – the most widely cited motivation framework in organisational psychology – says humans need three things from work: autonomy (the sense that you direct your own effort), competence (proof that you’re good at what you do), and relatedness (connection to the people around you).

Commission delivers the first two beautifully. You run your own diary. You build your own brand. Every closed deal is proof you can do something other people can’t.

The cost is the third. Relatedness. Commission-driven, individual-account-ownership models are structurally isolating. There’s no team in the way the psychology defines it. There are co-workers competing for the same listings.

This is maybe why agents earning $80,000 on commission resist a $90,000 salary offer. The dollars aren’t the issue. The story is. “I’m building my own business” is a fundamentally different psychological contract from “I’m employed by someone.”

Take away the unlimited earning potential and you take away the story – even if the money is the same or better. (Truthfully, it’s even made me wonder why I’m not earning the money I could be in IT or telco now!)

Financial advice went through exactly this identity shift.

Before the Future of Financial Advice reforms, the dominant identity was “financial adviser” – in practice, often a product salesperson paid by trail commissions. After the reforms, the survivors rebranded as wealth strategists, fiduciary planners, client directors. Same human, same desk, different story. It took a decade.

The question for real estate is whether “salaried agent” has to read as a demotion – or whether “specialist consultant” could read as an upgrade.

Who shows up, and who survives

The ATO’s 2022–23 data puts the median taxable income of real estate agents at $69,157. The mean – the average – is $100,531.

In plain English: a disproportionate number of high-earning agents pull the average up, making the industry look better-paid than it actually is for the typical agent. Most agents earn closer to $69,000 than to $100,000.

The US data sharpens the picture.

The National Association of Realtors reports that agents in their first two years earn a median of US$8,100. Their colleagues with sixteen-plus years of experience earn US$78,900. Same job title. A 9.7-times difference.

A major caveat: the US has a huge number of part-time agents – people who get licensed to sell a friend’s house or do two deals a year. That drags the rookie median down. But even adjusting for it, the early-career earnings cliff is real.

Compare that distribution to salaried sales. An Australian enterprise account executive – the person doing my old Cisco job – earns median on-target earnings (that’s base salary plus expected bonus) of around $230,000, according to RepVue’s 2026 data.

A first-year pharmaceutical sales rep in the US starts on roughly US$63,000, according to Glassdoor. The spread between the top and bottom of these roles is a factor of two or three. Not ten.

And the gender pay gap. The Workplace Gender Equality Agency reports a 25.7% median pay gap in the Australian property and real estate sector – women earn 74.3 cents for every dollar earned by men. The private sector average is 21.1%.

Commission was supposed to be the great equaliser. The data says otherwise.

Underneath all of these numbers sits survivorship bias.

Commission-only work has a hidden eligibility test: you need six to twelve months of personal financial runway to survive without a regular paycheque while you build pipeline. That selects for people with a working partner, family wealth, savings, or no dependents.

The system doesn’t select for talent or work ethic. It selects for those who can afford to go unpaid.

The visible success stories all worked hard – but you only see them because they survived the financial filter. Got out of debt. The ones who didn’t survive aren’t in the data.

Trust, and the question it raises

Roy Morgan has tracked Australian trust in professions for over three decades.

Real estate agents have sat in the bottom three for over a decade – rated 7% for honesty and ethics in 2017, a record-low 5% in 2021, and 9% in 2022. Nurses sit at 88%. Doctors in the low 80s. Accountants around 50%.

The bottom of the table reads like a compensation-structure index. Commission-paid persuasion professions cluster at the bottom. Salaried professions own the top. Fee-for-service sits in between.

A decade-plus of bottom-three placement isn’t a PR problem. It’s customers accurately reading the incentive structure they’re dealing with.

Which raises the question the customer would ask if anyone invited them into this conversation: would a salaried agent give a more honest appraisal? Underquote less? Show properties that match the buyer rather than the agent’s portfolio?

The research suggests the structural incentive shifts when you remove the commission. Whether the behaviour follows is a question Part 3 of this series will take on properly.

The honest acknowledgment

Commission works brilliantly for ethical agents at the top of their careers – skilled operators who’ve built reputations, referral networks, and a depth of expertise that justifies every cent they earn. For others, it appears to be a red rag for a bull.

This isn’t a call to cancel anything. It’s a question about defaults. Whether a system that works brilliantly for the best in the business should be the default structure applied to everyone.

Whether a model is sitting in plain sight – inside the same agencies, at the next desk, already running the property management side of the business – that nobody’s thought to apply to the transaction.

Change how agents are paid, and you change who gets paid by whom. Maybe it changes the work too.

But that’s a question for Part 2: “Follow the Money” – coming soon.

Sources

Salary and earnings data

  • ATO Taxation Statistics 2022–23, Table 15: Individuals – average and median taxable income by occupation and sex. ato.gov.au
  • Jobs and Skills Australia, Occupation Profile: Real Estate Sales Agents (ANZSCO 6121). jobsandskills.gov.au
  • Placed Australia, Residential Real Estate Industry Salary Guide 2025. placedaustralia.com.au
  • RepVue, Enterprise Account Executive Salaries in Australia, 2026. repvue.com
  • National Association of Realtors, 2025 Member Profile. nar.realtor
  • Glassdoor, Pharmaceutical Sales Representative Salary (US). glassdoor.com

Academic research

  • Levitt, S.D. and Syverson, C. (2008). “Market Distortions When Agents Are Better Informed: The Value of Information in Real Estate Transactions.” Review of Economics and Statistics, 90(4): 599–611. NBER Working Paper 11053
  • Rutherford, R.C., Springer, T.M. and Yavas, A. (2005). “Conflicts Between Principals and Agents: Evidence from Residential Brokerage.” Journal of Financial Economics, 76: 627–665.
  • Hsieh, C-T. and Moretti, E. (2003). “Can Free Entry Be Inefficient? Fixed Commissions and Social Waste in the Real Estate Industry.” Journal of Political Economy, 111(5): 1076–1122. NBER Working Paper 9208
  • Deci, E.L. and Ryan, R.M. (2000). “Self-Determination Theory and the Facilitation of Intrinsic Motivation, Social Development, and Well-Being.” American Psychologist, 55(1): 68–78. PDF

Gender pay gap

  • Workplace Gender Equality Agency, Gender Pay Gap Data: Property Operators and Real Estate Services. wgea.gov.au

Trust data

FoFA reforms

Inflation adjustment

  • Reserve Bank of Australia, Inflation Calculator. rba.gov.au