There are two types of Admin Fees. One is based on the Advance amount; the other is based on net payable commissions.
Advance based Admin Fee
This option is for those who want to assess an admin fee based on the agent’s gross advance which reduces their pay. Those fees are then used to defray the Company’s costs associated with supporting Advances.
- To have Advance based Admin fees applied, an Admin Fee rate is entered into Contract Commission Rates.
- The system calculates an Admin Fee during the Calculate Commission process for New Enrollments, when the Admin Fee Rate in the Commission Rates is present.
- If the Admin Fee Rate is 0% the system does not calculate an Admin Fee.
- If the Rate is > 0% the system calculates the Admin Fee by multiplying the Gross Advance (Advanced Commission + Advanced Fixed Amount), times the Rate.
- The Rate and Admin fee are displayed in the Results page of the cycle.
- The sum of the Advance based Admin Fees plus any amount from payable based Admin Fee are displayed in the Summary page.
- Admin Fees reduce the Current 1099 amount.
- The Advanced based Admin Fee details are displayed in the Agent Statement in the Commission Activity details.
Net Payable Commissions based Admin Fee
Comissio also has a feature to assign Admin fee based on net commissions. It is activated by a system setting. This type of Admin Fee can also be prevented from being assessed for specific agents using an option in the Agent Details. That option in Agent Details does not affect Advance based Admin Fees.
Admin Fee Setting
To apply the commission-based Admin Fee a setting other than ‘Do not apply must be selected. The choices are ‘Apply Admin Fee on terminated and Vested Agents only,’ or ‘Apply Admin Fee to all Agents.’ When ‘Do not apply’ is selected, only Advance based Admin fees would be assessed if a rate has been entered in Admin Rate Commission Rates.
Setting for Admin Fee
Either an Admin Rate or an Admin Fixed Amount can be entered but not both.
When an Admin Rate is entered, the Admin Fee will be that rate times their Net Commissions. So, for example, 2% Admin Fee x $100 in commissions is $2.00 Admin Fee.
With an Admin Fixed Amount, that amount will be assessed as a fee on the Agent if they have commissions greater than the Minimum Commission Threshold Amount. When an Admin Fixed Amount is used, then having a Threshold Amount of at least as much as the Fixed Amount is required. Tenants would want to use a Threshold Amount much higher. If the Fixed Amount were for example $50, and the Threshold amount was $50, when an Agent had only $50 in commissions, they would wind up with $0 net commissions.
The Minimum Commission Threshold Amount can also be used with an Admin rate. When an Agent makes less than the amount entered, they will not be subject to being assessed the Commission based Admin Fee based on that rate.
Setting in Agent Details to prevent Commission based Admin fee.
There is an option ‘Do not calculate Admin Fee’ for Agents or Organizations that the company decides should not be assessed a commission-based Admin fee. Advance-based Admin fee however can still be assessed on the Agent if an Admin Fee has been entered in the Commission Rates for Contracts that apply to that Agent.
Agent Details page with Do Not Calculate Admin Fee outlined.
How the Admin Fee assessed on an Agent is displayed
The total amount of the Admin Fee an Agent is assessed will be for both advanced-based and commission-based Admin Fees. The admin fee based on Advances will be shown in the Results page in a cycle and includes the details for the Advance, Rate from the Contract commission rate, and total per Agent and per Policy. If there is not a commission-based Admin Fee assessed, then the sum of what is seen in the Results page will be the Admin Fee displayed in the Summary for the Agent. If there is only commission-based Admin Fee, then only the amount of that fee will be displayed in the Summary. If there is both types of Admin Fee, then the total of both will be represented in the Summary.
When Agents view their statements, they will see the total of the admin fee reflected in the top summary portion in the sections for Payable Commission and Form 1099. Then in the Commission Activity section for each Policy, Agents will see the amount of Advance based Admin fee applied per Policy.
Results page in a cycle with (Advanced based) Admin Rate and Admin Fee outlined.
Summary page in a cycle with Admin Fee outlined that will show the total of Advance-based + commission-based Admin fees.
Summary in Agent Statement with Admin Fee total (Advance-based + commission-based)
Commission Activity section in Agent Statement with Admin Fee (Advance-based)
