In this article, you’ll learn how to set up common fees and deductions for your Brokerage; additionally, we’ll walk you through each type your Brokerage might utilize, and the three areas you will have to set up when adding your fee. So, let’s dive right in!


Deduction Settings - This is the backbone of every deduction.  *The❗items need special attention.

G/L Settings - Map your deductions appropriately. 

Level/Range Settings - These are the levels you’re looking for!  

FEES 101 

INCOME TYPE FEES - These fees contribute to a Brokerage’s income and reporting.
These fees are the most common fees set up in Brokerages. They can be as simple as a single $ or % amount or can be set up as several levels/amounts.

Split Fee -  % An income percentage fee created with 3 separate cap-level ranges.

Transaction Fee -  $ An income dollar amount fee created with 3 separate cap-level ranges.

Team Deduction Fee - % or $ An income fee deducted for all agents towards a combined team fee and/or cap.

STANDARD TYPE FEES - Deductions that do not contribute to Brokerage income.
These deductions & fees typically are used to cover items like coffee, printing, admin, and desk fees.

E & O Fee - % A trackable liability fee for Errors & Omissions Insurance.

Consumables Fee - % or $ fee to cover a coffee, printing, or admin fee.

PAYABLE TYPE FEES - These deductions will be paid out to an outside source.
These deductions & fees typically are used to track and pay outside sources eg., GST, non-licensed referrals, etc.

Using a payable  will create a bill to your specified Payee in Xero. You can set the Payee on the payable tab. There are two ways to set up your payable GL Accounts:

OPTION 1: You can select a payable ledger type and set it to clear to the commission payable GL account

OPTION 2: If you'd like to track the payables through their own GL account or if there is sales tax on the payable (most Canadian companies) you will use Option 2. 

You add 1 standard type and associate it to the GL account you'd like to track with and then add 1 Payable line that will then post the bill from the same GL account.

Franchise Fee - % A portion of an Agent's commission will be tracked in a Liability account and based on current brokerage commissions.

Gov’t Garnishment - % This deduction creates a payable to an income garnishment owed.

Non-Licensed Referral - % This deduction fee creates a payable referral from an Agent’s commission to an unlicensed or third party referral. 

Mentor Fee - % A portion of an Agent's commission will be paid to a mentoring Agent or the Brokerage.

Advance Recoverable - % This deduction recovers money owed to an agent’s equity advance company.

CREDIT TYPE FEES - These deductions create a credit note against an invoice in Xero.
Typically created to recover Agent’s expenses covered by a Brokerage.

A/R Recoverable  - % This deduction recovers money owed to the brokerage based on an agreed percentage of commissions.

REDUCE A/R TYPE FEE - This deduction reduces the expected receivable funds on a deal. (still have to film this, waiting on this to be fixed)

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