Real estate is a simple business to describe and a hard one to account for. You win listings, sell or lease property, and earn commission. But the commission lands weeks after the contract exchanges, sits in trust until settlement, gets split with a salesperson who may or may not be an employee, and carries GST, super and payroll tax questions along the way. Get those right and an agency is a strong cash business. Get them wrong and the bill can arrive years later, with interest.
What problems do agencies bring to us?
- Lumpy cash flow. A great March can mean a thin May bank balance, because commissions only flow after settlement.
- Contractor agents who look like employees. The agreement says contractor, but the agent works set hours, uses the agency's brand, desk, car allowance and leads, and has no other clients.
- Super and payroll tax nobody budgeted for. Both can apply to contractor agents, and both can be assessed back several years.
- GST paid on commission the agency hasn't received yet.
- Business books that don't match the trust account, so the year-end and the audit take longer than they should.
- Rent roll decisions made on rules of thumb: buying one, selling one, or deciding whether the property management side pays its way.
What do we do for real estate agencies?
- Xero bookkeeping, updated daily, with commission income matched to the trust account transfers for each property.
- A commission pipeline forecast: exchanged but unsettled deals by expected settlement date, so you can see cash coming in over the next 90 days.
- BAS and GST, on the accounting basis that suits your cash flow.
- Payroll and Payday Super for employees and, where required, super for contractor agents.
- Payroll tax registration, monthly returns and annual reconciliations, including the contractor provisions.
- Salesperson agreement review from a tax angle, with an employment lawyer where the arrangement needs to change.
- Rent roll analysis for purchases, sales and internal performance.
- Tax returns for the agency, the principals' trusts and companies, and the principals personally.
Our state taxes agent drafts the payroll tax analysis for each state you operate in, and our transaction coding agent suggests codes and GST treatment for unreconciled bank lines and drafts questions for the ones it can't place. A qualified accountant reviews and signs off all of it.
Which numbers should an agency principal watch?
| KPI | What it shows | How to measure |
|---|---|---|
| Gross commission income (GCI) per salesperson | Productivity of each agent | Commission earned ÷ salespeople (full-time equivalent) |
| Agent split as % of GCI | Whether the split model leaves the agency enough | Total paid to salespeople, including super and payroll tax ÷ GCI |
| Average commission rate | Fee pressure in your market | Commission ÷ sale prices |
| Listing to sale conversion | Quality of listings | Sales ÷ listings taken |
| Commission pipeline | Cash due in the next 30, 60 and 90 days | Exchanged, unsettled commissions by settlement date |
| Properties under management and growth | Rent roll health | Number at month end, gains vs losses |
| Management income per property | Pricing of the rent roll | Management fees and other PM income ÷ properties |
| Properties per property manager | Workload and service risk | Properties ÷ PM staff |
| Rent arrears % | Quality of the roll | Arrears ÷ rent due |
| Net profit margin | Whether the whole thing works | Profit after principals' market wages ÷ total income |
We report these monthly on our Business Insights and Fractional CFO plans, and the property management numbers are the ones that most affect what your business is worth when you sell.
How do you manage cash flow between settlements?
The commission is usually earned under the agency agreement when contracts exchange, or when the sale completes, depending on the agreement. The cash reaches your business account only once settlement happens and the commission is transferred from trust. Settlement periods of six weeks or more are common, and some run much longer.
Example (hypothetical): An agency exchanges $280,000 of commission in March. None of it settles until May. In April it still pays wages, rent, advertising and its BAS. If contractor agents are paid on settlement, that part lines up. If salespeople get draws or advances against future commission, the agency is carrying them, and some won't be earned back if a deal falls over.
What helps:
- A rolling 13-week cash flow forecast built from the pipeline, updated weekly
- Paying salespeople on settlement, not exchange, and keeping draws modest and documented
- A cash buffer of one quiet month's fixed costs
- Building the property management side, which pays monthly and smooths everything else
See our guide to cash flow forecasts and our cash flow management service.
Are contractor agents really contractors?
That's the most expensive question in the industry, and it has three separate answers: one for workplace law, one for super, and one for payroll tax. An agent can be a contractor for one and still trigger the others.
| Test | What it asks | What it means for you |
|---|---|---|
| Workplace law (employee or contractor) | The real substance of the whole relationship, including how it works in practice | If an employee, the Real Estate Industry Award applies: minimum pay, leave, and super |
| Super guarantee | Is the contractor paid mainly for their labour? | If yes, you must pay super on the labour part, even if they have an ABN |
| State payroll tax | Is there a "relevant contract" under the contractor provisions, and does an exemption apply? | If yes, payments to the agent are taxed as wages |
On super, the ATO is direct: independent contractors who are paid mainly for their labour are eligible for super guarantee, even if they quote an ABN and regardless of how much they earn. Commission-only salespeople who sell for one agency under its brand often fall into this. From 1 July 2026, under Payday Super, super must reach the fund within days of each payday, so get the setup right now. See our payday super guide.
On workplace law, the Real Estate Industry Award covers property sales and property management staff. It permits commission-only employment for sales staff only where strict conditions are met, including a written agreement; otherwise the award's minimum wage applies. Our employee vs contractor guide walks through the tests.
How does payroll tax apply to an agency?
Payroll tax is a state tax on wages above a threshold, and every state has contractor provisions that can bring contractor commissions into the wage total. Related agencies, for example two offices under common ownership, are grouped and share one threshold.
| State | Annual threshold (2026–27) | Rate |
|---|---|---|
| NSW | $1,200,000 | 5.45% |
| Victoria | $1,000,000 (phases out for larger payrolls) | 4.85% general |
| Queensland | $1,300,000 (deduction reduces above that) | 4.75% up to $6.5 million of wages |
| South Australia | $1,500,000 | Up to 4.95% |
Other states and territories have their own figures; see our payroll tax guide. The common mistake is to calculate payroll tax on employee wages only and ignore what's paid to contractor agents. If you're near the threshold, contractor commissions can tip you over. Exemptions exist but are narrow and differ between states, so we work them through state by state through our state taxes service.
What about trust account audits?
Every state requires real estate trust accounts to be audited each year by a qualified, independent auditor, and the rules differ by state. In NSW, for example, the audit period is the year to 30 June and the audit must be lodged within three months, by 30 September; if the trust account had no transactions, there is a separate process. Check your state regulator's requirements for your period and deadline.
We don't audit trust accounts. What we do is keep the agency's general books reconciled to the trust account, so every commission, advertising recharge and disbursement transferred out of trust is recorded correctly in the business. That makes the auditor's job faster, and it means the commission in your profit and loss actually matches what left trust.
How is GST timed on commission?
If your agency accounts for GST on the accruals basis, GST on a commission is payable in the BAS period you issue the tax invoice, even if the money is still in trust waiting for settlement. Businesses with aggregated turnover under $10 million can usually choose the cash basis instead, so GST is paid when the commission is actually received. For an agency with long settlements, that can make a real difference to cash flow. Our BAS and GST service covers the switch.
What's the right structure for an agency?
The licensing rules in your state come first: who must hold the licence, who is licensee in charge, and which entity holds the trust account. Within those rules, a common setup is:
- An agency company that holds the corporate licence, employs staff, contracts with agents and owns the rent roll.
- A family trust owning the shares in the company, so profit can be shared across the family.
- Principals' personal guarantees kept to a minimum, because they sit outside any structure.
Contractor agents who trade through their own company or trust should know the personal services income rules may tax the income as theirs personally anyway. Buying or selling a rent roll is a business sale: see buying a business and selling a business.
How does working with BPAG work?
- Free strategy call about your agency, your salespeople and what's worrying you.
- Health check: contractor agreements, super, payroll tax and GST basis reviewed, with any exposure quantified.
- Set-up: Xero matched to your trust accounting software's transfers, pipeline forecast built.
- Monthly rhythm: books, BAS, payroll, payroll tax, KPIs and a forecast you can trust.
Pricing is fixed; see our pricing page. A sole-principal agency with a small team often fits Business Insights; multi-office groups usually need Fractional CFO.
What should you send us?
- Last two years' financial statements and tax returns for each entity
- Xero access, or your current bookkeeping file
- Trust account transfer reports for commission and fees for the last 12 months
- Every salesperson and property manager agreement, with what each was paid last year
- Payroll tax registrations and returns, and STP payroll reports
- Last year's trust account audit report
- Your pipeline of exchanged but unsettled sales
- Rent roll details: number of properties, management fee rates and churn
Frequently asked questions
Can you audit our real estate trust account?
No. Trust account audits must be done by an auditor who meets your state's requirements and is independent of the agency. We keep your business books reconciled to the trust account transfers and work with your auditor so their job is quicker. If you need an auditor, we can introduce you to one.
Are my salespeople's commissions subject to GST?
Commission the agency earns from a vendor or landlord is subject to GST if the agency is registered. What the agency then pays a contractor salesperson carries GST only if that salesperson is registered for GST. Employee salespeople don't charge GST; their commission is wages.
Do contractor agents need their own ABN and accountant?
A genuine contractor needs an ABN and must register for GST once their turnover reaches $75,000. If they trade through a company or trust, the personal services income rules may still tax the income in their own hands. We act for many individual agents as well as agencies, and we keep the two roles separate where there's a conflict.
Is a rent roll purchase tax deductible?
No. The price paid for a rent roll is a capital cost, not a deduction, and it isn't depreciated. It forms part of the cost base for capital gains tax when you sell. Interest on money borrowed to buy it is generally deductible.
How should agency principals pay themselves?
It depends on the structure and on how much profit stays in the business. Directors of an agency company can take a wage, dividends or a mix, and loans from the company trigger Division 7A. We set a plan at the start of the year so you're not caught out at tax time.
Official sources
General information only, current as at 18 October 2026. It is not personal tax, legal or financial product advice and doesn't take your circumstances into account. Talk to us before you act. Where a recommendation needs a licensed financial adviser or a solicitor, we work alongside them.