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Real estate salespeople in New Zealand typically earn nothing unless they close deals. Photo by Tima Miroshnichenko

👀 What’s Going On in NZ?

Real estate salespeople in New Zealand typically earn nothing unless they close deals. That leaves agents shouldering all the risk while agencies profit steadily.

Here’s how the odd system works, why it’s allowed, and why critics say it’s massively unfair.

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1. Commission‑Only Roles: How They Work in NZ

  • In New Zealand, nearly all real estate salespeople operate under commission‑only arrangements: they only earn when a property sells, receiving a cut from the vendor-paid commission RNZ+3fisbo.co.nz+3Reddit+3Reddit+1Reddit+1.

  • Typical commission rates range from 2%–4%, often tiered — for example, 3.95% on the first $300K + 2% thereafter fisbo.co.nz.

  • From a sale at the national average price ($865K), the total commission ($23K) is split between agency and agent — with agents netting around 55%–70% fisbo.co.nz.

If they don’t sell anything that year, they have zero income.

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2. GST

3. Expenses & Commission Splits Eats Take‑Home Pay

  • After GST, agency and franchise fees, and marketing/admin deductions, an agent’s share might be 40–60% of the gross commission fisbo.co.nzRNZ.

  • Agents also cover their own expenses: marketing, photography, advertising, business cards, car running costs, clothing — all nondeductible upfront Reddit+1Reddit+1.

That $23K commission can shrink to just $10K–$13K before personal tax and expenses.

4. Why the System Exists — and Persists

5. What the Numbers Reveal

  • On average, NZ real estate agents make about 4.4 sales per year RNZ.

  • That hides massive variation: some agents earn far less, while top performers can net six figures — but only after huge swings in market demand.

  • Agents who sell just one house per month can exceed $150K before expenses — but many don’t sell that often fisbo.co.nz.

💬 Voices from the Forums

“So for a real estate agent, you need to realise they only get paid when they sell your property. … Then less their expenses… No sale = no pay.”
— Reddit user, Auckland locals discussing commission-only realities RedditSEEK+1RNZ+1

“Most make bugger all… The successful agents make heaps… Very fluctuated income honestly.”
— PersonalFinanceNZ forum thread on real estate pay Reddit+15Reddit+15Reddit+15

🧭 Table: NZ Agent Commission Reality

Component What’s Actually Happening
Income structure Commission-only, no base salary, no PAYE withheld
GST obligations Agents bill and remit 15% GST themselves
Fee splits Agents retain ~50–70% of commission after GST and fees
Costs covered by agent Marketing, transport, admin, photography, business overheads
Regulation & oversight Agency must have written agreement; REA enforces conduct, not pay rights
Market risk Income fluctuates — zero if no sales
Average annual commission ~$120K per year (gross), but wide income variance

⚠️ Bottom Line: How Do They Get Away With It?

Because the structure is legal and standardised. Real estate agencies avoid fixed payroll costs. Agents willingly sign commission-only contractual agreements. The governing legislation and REA focus on client care, disclosures, and licensing, not on guaranteeing agents any minimum pay.

❓ Should the System Change?

Critics argue:

  • The model places all financial risk on agents.

  • Agents carry tax burden plus variable income.

  • There’s limited income protection during slow markets.

Some suggest reforms like:

  • Commission or pay thresholds (like MITA in AU).

  • Tighter classification rules to prevent disguised contractor arrangements.

  • Minimum income or partial salary guarantees.

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