A Guide to Salaries, Commissions and Taxes of Real Estate Agents

A Guide to Salaries, Commissions and Taxes of Real Estate Agents

About 108,000 real estate agents operate throughout Canada. This gives an idea as to why there is an increased focus on the CRA guidelines in connection with the taxes, commissions, salaries and deductions pertaining to real estate agents in Canada.

Whether you have been filing CRA taxes for several years or you are going to do so for the first time, here is what you need to know about these aspects.

The Average Salary of Real Estate Agents

On average, Canadian real estate professionals receive an income of $60,000; the figure may be slightly more or less based on the experience level of an agent. Sometimes it may also fluctuate depending on the market conditions.

The salary range for the real estate professionals who operate in Canada is given below.

  • Total Pay: $35,000 – $121,010
  • Salary: $36,799 – $120, 00
  • Bonus: $503 – $39,732

The level of earnings may vary from the baseline of $60,000 in the following manner:

  • Entry-level: – 3 %
  • Mid-Career: + 17 %
  • Experienced: + 54%

Commission Rates for Real Estate Agents

Real estate agents in Canada have the liberty to set their preferred commission rate at the initial stages of signing a contract. Not only are they allowed to negotiate the rates but are also provided with the choice of deciding on whether to get paid hourly a certain percentage of the actual amount of money generated by virtue of a sale.

At times commissions may vary owing to three key aspects: the present situation of the domestic real estate market, the company for which a realtor works and the cost of purchasing a property.

While the commission rates may be lesser when smaller companies are involved, relators may consider lowering commission rates in markets that are more competitive.

What is The Difference Between a Real Estate Agent and a Salesperson?

The real estate market is a diverse world which comprises of a variety of professionals such as salespersons, mortgage brokers, real estate agents and more of the same.

The job role of a mortgage broker is to assist their clients in financial transactions pertaining to real estate. On the other hand, a real estate salesperson, a term used in Ontario, is a lesser-trained version of a registered broker who deals with the aspects of a real estate.

On the other hand, according to the CRA, an agent is someone who facilitates the operations of a registered broker. They may either be self-employed or they may work for a broker as their employee.

The CRA takes the following considerations into account while deciding whether or not a real estate agent has filed their report appropriately:

  • What activities of an agent are controlled by the broker?
  • Is the advertising of an agent self-paid?
  • Is the broker allowed to hire their own staff?
  • Are the commission rates determined by the broker?
  • Is an agent allowed to hire their own staff?
  • Does an agent require to carry out a particular task for their broker?

As for a real estate agent, they may operate either as a proprietor or a partner. We provide accounting services at competitive prices. Contact us for accounting services in North York Ontario.