After every split and deduction, a real estate agent typically keeps between 1% and 2% of a home’s sale price. On a $400,000 house, how much commission a real estate agent gets after the brokerage split, franchise fee, transaction costs, and self-employment taxes usually lands somewhere between $3,500 and $6,000. The gap between the headline commission the seller pays and what reaches the agent’s bank account is wider than most people assume.
How the Total Commission Splits Between Two Brokerages
The total commission on a home sale has historically run between 5% and 6% of the sale price. Recent survey data puts the 2026 national average near 5.7%, with the listing agent’s side averaging about 2.88% and the buyer’s agent side averaging about 2.82%. Those percentages are negotiable in every transaction.1National Association of REALTORS®. Compensation, Commission and Concessions
On a $400,000 sale at a 5.5% total commission, the $22,000 pot is divided first between the listing brokerage and the buyer’s brokerage. The two sides are increasingly negotiated independently, so the split isn’t always 50/50. The individual agent’s math only starts with their brokerage’s portion, which on an even split is $11,000.
Since 2024, buyer-agent compensation can arrive through several routes. The buyer may pay their agent directly, the seller may offer concessions that cover it, or the listing broker may share a portion of their fee. The dollars flowing through the deal haven’t disappeared, but the path is more negotiated than it used to be.2National Association of REALTORS®. Summary of 2024 MLS Changes
The Agent’s Split With Their Own Brokerage
Once the brokerage receives its side, the next cut is between the brokerage and the agent. The ratio sits in the agent’s independent contractor agreement and varies with the firm’s model, the agent’s production, and what the brokerage provides in return.
Fixed Splits
A flat percentage split applies to every closing. Common ratios:
- 50/50 is typical for new agents or firms that provide heavy training, leads, and admin support. On an $11,000 side, the agent keeps $5,500.
- 70/30 fits experienced agents who bring their own business but still use the brokerage for branding and compliance. The same $11,000 yields $7,700.
- 80/20 is reserved for top producers who mainly need legal compliance and MLS access. The agent keeps $8,800.
The higher the agent’s share, the less the brokerage covers. An 80/20 agent is usually paying for their own marketing, leads, and admin.
Graduated Tiers and Caps
Many brokerages improve the split as the agent hits annual production milestones. A tier structure might start at 60/40 on the first $50,000 of gross commission income, rise to 70/30 on the next $50,000, and reach 80/20 above that. Tiers typically reset every January.
Cap models work differently. The agent pays a fixed split until they’ve contributed a set amount to the brokerage, often between $12,000 and $23,000 per year depending on the brand and market. Once the agent caps, they keep 100% for the rest of the year, though most firms still charge a per-closing fee of $250 to $500 after that. For a producer who caps early, this can beat any fixed split.
100% Commission Shops
Some firms skip the split and charge a flat monthly desk fee, usually $500 to $2,000, whether the agent closes anything or not. The math works for consistent producers. Two or three slow months in a row can hurt a newer agent fast.
What a Team Takes Off the Top
Agents on a real estate team face a split that solo agents never see. The team leader takes a percentage of each member’s commission before the remainder reaches the agent. On a team where the leader supplies all the leads, branding, and marketing, a new buyer’s agent might keep only 40% to 50% of the side commission.
The splits stack. If a team sits inside a brokerage taking 25%, the remaining 75% goes to the team, and the team’s internal split applies next. On a $12,000 side, the brokerage takes $3,000, the team receives $9,000, and a 50/50 team split leaves the agent $4,500. That’s 37.5% of the original side commission. Agents who bring their own leads can often negotiate a better team cut, sometimes 70/30 or 80/20 in their favor.
Fees Pulled Off the Agent’s Share
The split ratio isn’t the whole story. Several deductions come off before the agent sees a check, and some come off before the split is even calculated.
Franchise fees. Agents under national brands like RE/MAX, Coldwell Banker, or Century 21 typically see a franchise fee of about 6% skimmed off the gross commission before the agent-brokerage split applies. On an $11,000 side, that’s $660 gone first, which quietly reduces every downstream number.
Errors and Omissions insurance. Most brokerages deduct $50 to $200 per closed file for E&O coverage, which protects both the agent and the brokerage against professional negligence claims. Some firms roll it into a flat annual premium instead.
Transaction coordinator fees. An agent who uses a TC to manage paperwork from contract to closing generally pays $300 to $1,000 per file.3RISMedia. What Is the Cost of a Transaction Coordinator in Real Estate Some brokerages require one; others leave it optional. The cost comes out of the agent’s share either way.
Referral and lead fees. This is the deduction that surprises new agents the most. When a lead comes from a referral company or online platform, the source takes a cut of the agent’s commission at closing, now commonly 25% to 40% depending on the platform and the price point. On a $10,000 agent commission, a 35% referral fee removes $3,500 before anything else. Agents who generate their own business from a personal sphere avoid this entirely.
Dues and recurring overhead. Agents who hold the Realtor designation pay national, state, and local dues. The national portion alone runs about $200 a year including mandatory assessments, with state and local dues adding several hundred more. MLS access, continuing education, lockbox fees, and license renewal round things out. All in, recurring costs often run $1,000 to $2,500 a year, owed whether the agent closes ten deals or zero.
When One Agent Represents Both Sides
In a dual agency deal, a single agent or brokerage represents both buyer and seller. The brokerage keeps the full commission instead of sharing with a cooperating firm. The agent may agree to trim the total slightly, but per-deal income is substantially higher than a one-sided transaction. Dual agency is legal in most states; roughly eight prohibit it outright. Where it’s allowed, both parties must consent in writing, and the agent can’t advocate for one side over the other.
Taxes the Agent Pays Themselves
Federal tax law treats real estate agents as independent contractors, not employees. The brokerage withholds nothing.4Office of the Law Revision Counsel. 26 USC 3508 – Treatment of Real Estate Agents and Direct Sellers The agent calculates and pays everything.
Because no employer is covering half of payroll tax, the agent owes the full 15.3% self-employment tax, which is 12.4% for Social Security and 2.9% for Medicare.5Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes) The Social Security portion stops at an annual wage base ($184,500 for 2026); the Medicare portion has no cap.6Social Security Administration. Contribution and Benefit Base
Agents are expected to make quarterly estimated payments. Missing or underpaying them triggers an IRS penalty based on the shortfall and the published quarterly interest rate.7Internal Revenue Service. Underpayment of Estimated Tax by Individuals Penalty A workable rule of thumb is to set aside 25% to 30% of every commission check for federal income tax, state income tax, and self-employment tax combined.
On the other side of the ledger, Section 199A lets eligible self-employed taxpayers deduct up to 20% of qualified business income from taxable income.8Internal Revenue Service. Qualified Business Income Deduction Income limits and phase-ins apply at higher earnings. Deductions for mileage, marketing, home office use, and insurance premiums reduce taxable income further.
A $400,000 Sale, Start to Finish
Running one deal all the way through makes the stack clearer. Take a $400,000 sale at a 5.5% total commission:
- Total commission: $22,000
- Buyer’s agent brokerage side (roughly half): $11,000
- Franchise fee at 6% off the top: −$660, leaving $10,340
- Agent’s share at a 60/40 split: $6,204
- E&O insurance: −$100
- Transaction coordinator: −$400
- Agent’s gross before taxes: $5,704
- Self-employment tax at 15.3%: −$873
- Federal and state income tax at an estimated 20% effective rate: −$1,141
- Approximate net take-home: $3,690
That $3,690 is about 0.9% of the sale price and roughly 17% of the total commission the seller agreed to pay. An agent on an 80/20 split at a non-franchise brokerage keeps considerably more. An agent who got the lead from a referral platform keeps considerably less.
Across the first few years, most agents net somewhere between 30% and 45% of their brokerage’s side commission after every deduction and tax. Experienced agents with better splits, lower overhead, and self-generated leads push that figure higher, which is why building a personal referral network matters more to an agent’s pay than almost any other business decision.