Real estate assistants can get commission only if they hold an active real estate license. An unlicensed assistant cannot legally receive any pay tied to whether a deal closes, no matter what the brokerage calls the payment. That single rule — licensed means commission-eligible, unlicensed means not — governs how these roles are paid in every state.
How Licensed Assistants Earn Commission
A licensed assistant who holds an active real estate salesperson or broker license can legally be paid on commission. The most common arrangement is a split of the lead agent’s gross commission: the assistant earns a set percentage of what the agent collects on transactions they helped close.
Referral fees are a second income stream. When a licensed assistant brings a new buyer or seller lead into the brokerage, they can earn a percentage of the commission that lead eventually generates. Industry referral fees typically run from 20% to 35%, with 25% as the most common benchmark.
Every commission payment has to flow through the brokerage. The broker of record collects the full commission at closing, takes the brokerage’s share, and then distributes payments based on the written agreements on file. A lead agent cannot write a personal check to their licensed assistant after a sale closes. This is a legal requirement in every state, not an internal preference, and brokerages that let agents handle splits informally invite regulatory problems.
Before any work begins, the assistant, the lead agent, and the broker should sign a written agreement covering the commission split percentage, which transactions qualify, how referral fees are calculated, and when payment follows closing. That document is what protects the assistant’s income if a dispute comes up later.
One caveat: a licensed assistant whose pay is mostly hourly rather than tied to sales output may not actually be functioning as a commissioned salesperson. If that’s the case, the brokerage may need to treat them as a regular employee despite the license. The substance of the pay arrangement controls, not the title on the business card.
How Unlicensed Assistants Have to Be Paid
Without a license, compensation has to be fully disconnected from whether any particular deal closes. Three pay structures work:
- Hourly wages, the most common arrangement. The federal minimum wage is $7.25 per hour, and many states and cities set higher floors.
- Salary, which gives the assistant predictable monthly income regardless of how many properties the brokerage sells.
- Flat task-based fees for discrete jobs like coordinating a photo shoot, filing documents, or running a direct mail campaign. The fee has to be for the work itself, not contingent on a closing.
The Fair Labor Standards Act applies to most unlicensed assistants because they perform administrative work under the brokerage’s direction. Brokers have to track hours and pay overtime at one-and-a-half times the regular rate for any hours past 40 in a workweek. The only way out of overtime is the FLSA’s administrative exemption, which requires a salary of at least $684 per week ($35,568 annually) plus duties involving independent judgment on significant business matters. Scheduling, data entry, and filing generally don’t meet that duties test regardless of pay level.1U.S. Department of Labor. Earnings Thresholds for the Executive, Administrative, and Professional Exemption From Minimum Wage and Overtime Protections Under the FLSA
Brokers also have to keep records of hours worked, wages paid, and basic employee information for every non-exempt worker. The FLSA doesn’t prescribe a format, but the records have to exist and be accessible.2U.S. Department of Labor. Fact Sheet 21 – Recordkeeping Requirements Under the Fair Labor Standards Act (FLSA)
Why Per-Closing Bonuses to Unlicensed Staff Are Illegal
This is where most compliance problems happen. A brokerage wants to reward a hardworking unlicensed assistant, and the most intuitive way is to tie a bonus to closings. That intuition is wrong.
A bonus paid every time a specific property closes, or a fee triggered by a successful settlement, looks like a commission no matter what the brokerage calls it. Regulatory boards treat per-closing payments to unlicensed staff as illegal success fees, and discovering one can trigger an investigation of the entire brokerage’s compensation practices.
Lawful bonus structures tie rewards to effort and output rather than deal outcomes:
- Productivity bonuses based on the number of listings processed, marketing campaigns launched, or files organized in a period.
- Quality bonuses tied to client satisfaction scores or error-free document processing.
- Periodic bonuses, such as holiday pay, annual merit increases, or quarterly performance awards keyed to overall job performance.
The test regulators apply is simple: would the assistant still earn this payment if the deal fell through? If the answer is no, the payment is structured like a commission and will be treated as one.
What Unlicensed Assistants Can and Cannot Do
Pay rules exist because licensing rules exist. An unlicensed assistant who performs licensed activities and gets paid for the result has earned an illegal commission even if the paycheck says “bonus” or “hourly.”
Unlicensed staff can handle administrative support, marketing production, document delivery, property logistics such as placing signs and setting up open houses, and research like pulling comps and public records. They cannot show a property and discuss its features with a prospective buyer, interpret or explain contract terms, discuss pricing or sale conditions, or solicit clients for the brokerage. At an open house, the unlicensed assistant greets visitors and hands out pre-approved materials. The moment they start answering questions about the property’s condition, neighborhood, or price, they’ve crossed the line.
Document delivery trips people up most often. An unlicensed assistant can physically hand someone a contract, but cannot explain what any part of it means. The distinction feels artificial, which is exactly why it gets ignored.
Penalties for Crossing the Line
Penalties vary by state but are consistently serious. Most states treat a first offense of unlicensed practice as a misdemeanor carrying up to six months of jail time and fines reaching several thousand dollars per violation. Some states escalate repeat offenses to felonies. The brokerage also faces regulatory consequences, including possible license suspension for the supervising broker. State real estate commissions investigate complaints and audit brokerages that blur the licensed-unlicensed line.
How Each Pay Structure Is Taxed
Tax classification follows the pay arrangement, and getting it wrong is expensive for the brokerage.
Licensed Assistants Paid on Commission
Federal tax law carves out a specific category for licensed real estate agents. Under 26 U.S.C. § 3508, a licensed agent is treated as a statutory non-employee — the brokerage does not withhold income tax or pay employment taxes on their behalf — if three conditions are met: the person holds an active real estate license, substantially all of their pay is tied to sales output rather than hours worked, and a written contract states they will not be treated as an employee for federal tax purposes.3Office of the Law Revision Counsel. 26 U.S. Code 3508 – Treatment of Real Estate Agents and Direct Sellers
Licensed assistants who meet all three criteria receive income without withholding and are responsible for their own self-employment taxes and estimated quarterly payments. The brokerage reports their earnings on Form 1099-NEC. For 2026, the reporting threshold has risen to $2,000 in annual payments, up from the previous $600.4Internal Revenue Service. 2026 Publication 1099
Unlicensed Assistants Paid Hourly or by Salary
Unlicensed assistants generally don’t qualify for statutory non-employee treatment because they lack a license. The IRS applies its common-law test, which looks at behavioral control, financial control, and the nature of the relationship. When a brokerage sets hours, provides workspace, assigns tasks, and pays by the hour, that’s an employment relationship. The brokerage has to withhold income tax and pay the employer’s share of Social Security (6.2%) and Medicare (1.45%) taxes.5Internal Revenue Service. Employee (Common-Law Employee)6Social Security Administration. Contribution and Benefit Base
Classifying an unlicensed assistant as a 1099 contractor to dodge payroll taxes is one of the more expensive mistakes a brokerage can make. The IRS can assess back taxes, penalties, and interest, and the assistant loses access to unemployment insurance, workers’ compensation, and overtime protections while the misclassification runs. If the brokerage controls how, when, and where the work gets done, the worker is an employee regardless of what the contract says.