Commission versus draw can vary, but in general terms a commission is earned at the time of a sale, and paid shortly thereafter or as outlined in the contract between the salesperson and the employer. Draw is pay against future commissions not yet earned. So one can 'draw' against next month's commission in order to receive a paycheck in the current month, for an example. It is like salary in
. terms of steady income, but it is also a little risky since one may not know what their next month's (or week, quarter, or semi-annual) sales commissions may actually be. It may work well in seasonal situations, but can also be quite a gamble. If the salesperson is terminated, they will be responsible to re-pay the draw that has been given to them unless otherwise agreed upon by both parties. A draw is therefore essentially an advance or loan against future commissions, and typically used in the sales fields only.
