How does a draw against commission work?

A draw is a fixed amount paid each pay period against commissions to come. A recoverable draw is repaid from later commissions; a non-recoverable draw is not. Minimum wage is owed for every workweek; federally, a draw below it within a settlement period can be made up when commissions are settled at period end. Keep the plan's terms on file; California requires a written contract with a signed receipt.

Do spiffs count as wages?

Spiffs and bonuses the dealership pays through payroll are supplemental wages for federal income tax withholding, like commissions. For staff who are owed overtime, they also go into the regular rate.

Can one payroll cover several dealership entities?

Yes. Worklio runs multiple FEINs in the same payroll run, on one pay date and one tax batch, and you can roll up or drill down by FEIN. Each company still issues W-2s for what it pays, unless one company pays as common paymaster.

What does dealership payroll connect to?

Commissions are imported from your dealer management system. Payroll posts to QuickBooks through a direct integration, or goes out as G/L exports to any accounting platform.

INDUSTRIES / HOURLY + MULTI-SITE / Auto dealer groups

Commissions, flag hours, and draws: paid right.

Dealer groups with sales commissions, technician flag-hour pay, and multiple rooftops.

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COMMISSIONS: Imported from DMS
FLAG HOURS: Technician pay
DRAWS: Recoverable + non
ROOFTOPS: Multi-entity

WHAT'S INCLUDED

01
Commission imports
From your dealer management system.
02
Flag-hour pay
With minimum wage true-ups.
03
Draws
Recoverable and non-recoverable.
04
Multi-rooftop
Each store as its own entity.

WHERE IT GOES WRONG

Draws, commissions, and spiffs.
Draws, per-unit bonuses, and spiffs change month to month, and the settlement often lives in a spreadsheet beside payroll.
How Worklio handles it
Commissions imported from your dealer management system, with recoverable and non-recoverable draws.
Technicians and overtime.
Federal law exempts salesmen, partsmen, and mechanics primarily selling or servicing vehicles at a dealership that sells to ultimate purchasers from overtime, but not from minimum wage. The exemption is federal only: state law can be stricter, and other staff fall outside it.
How Worklio handles it
Technician flag-hour pay with minimum wage true-ups.
Rooftops and FEINs.
Each store can be its own legal entity while staff float between stores. Each company that pays a shared employee reports what it pays, unless one company pays as common paymaster.
How Worklio handles it
Each rooftop its own entity, with multiple FEINs in the same payroll run, on one pay date and one tax batch. Roll up or drill down by FEIN.
Turnover on the sales floor.
Every new hire needs an offer, tax forms, an I-9, and a pay plan on file before the first deal.
How Worklio handles it
Offer letters e-signed from any device; W-4, state forms, I-9, and direct deposit collected online; documents, including pay plans, e-signed and stored.
Benefits and comp for a mixed workforce.
The same benefits plan has to work for porters, technicians, and managers.
How Worklio handles it
Benefits and pay-as-you-go workers' comp through Worklio Insurance, quoted from your real census and wages.

WHAT TO HAVE ON FILE

01Pay plan terms on file. Federally, for employees under the retail commission exemption, a copy of the agreement or a memo of its terms. California requires a written commission contract, a signed copy for the employee, and a signed receipt.
02Overtime status by duties. The dealership exemption for salesmen, partsmen, and mechanics primarily selling or servicing vehicles; the retail commission exemption; another exemption; or overtime on the regular rate.
03Minimum wage each workweek. Pay for each workweek divided by hours worked: at least $7.25 an hour federally, or a higher state or local minimum. Federally, a draw below that within a settlement period can be made up when commissions are settled.
04The retail commission tests. A regular rate of at least $10.88 an hour (more than 1.5 times the $7.25 federal minimum) in each overtime week, and more than half of pay from commissions over a representative period of one month to one year.
05One W-2 per paying company. Each related company issues a W-2 for what it pays, unless one company pays all wages as common paymaster.

WORK IT OUT

Calculators follow federal rules only; state law can differ.

QUESTIONS

Often, under federal law. Salesmen, partsmen, and mechanics primarily selling or servicing vehicles at a dealership that sells to ultimate purchasers are exempt from overtime, not from minimum wage; DOL counts service advisors among them. Commissioned staff outside those roles may qualify for the retail commission exemption; otherwise, unless another exemption applies, overtime is owed on a regular rate that includes flat-rate and commission pay. The dealership exemption is federal; state law can be stricter.

Sources: 29 U.S.C. 213(b)(10); DOL Fact Sheet #11; 29 U.S.C. 207(i); DOL Fact Sheet #20; 29 CFR 516.16; Cal. Labor Code 2751; 29 CFR 776.4; 29 CFR 778.118; 29 CFR 778.211; DOL: federal minimum wage; 26 CFR 31.3121(s)-1; IRS Publication 15. General information, not legal or tax advice.

HOW IT WORKS

A planned go-live, with parallel runs first.

01Discovery + design. We map entities, pay rules, deductions, and integrations.
02Data + configuration. YTD wages, tax accounts, benefits, and GL mapping loaded and tested.
03Parallel runs. One or more payrolls run beside your current provider and matched to the cent.
04Go live. Usually at a quarter or year start. Employees invited, your team trained.