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The Sales Commission Letter To Employees is a critical document used in Malaysian business contexts to formalize the commission-based compensation arrangements between employers and their sales staff. This document is typically issued either at the start of employment or when implementing or modifying commission structures. It serves as a supplementary agreement to the main employment contract, specifically detailing how sales commissions are earned, calculated, and paid. The letter must comply with Malaysian employment law, particularly the Employment Act 1955 and related regulations governing wages and compensation. It's essential for businesses employing sales personnel on commission-based or hybrid compensation models, providing clarity and legal protection for both parties while establishing clear performance expectations and reward structures.

1. Letter Header: Company letterhead, date, and employee details including name, position, and employee ID

2. Subject Line: Clear indication that this is a Sales Commission Letter

3. Introduction: Brief statement confirming the employee's eligibility for commission and reference to their employment agreement

4. Commission Structure: Detailed explanation of the commission rates, tiers, or percentages applicable

5. Calculation Method: Clear explanation of how commissions are calculated, including the basis (gross sales, net sales, etc.)

6. Payment Terms: When and how commissions will be paid, including payment frequency and any minimum thresholds

7. Qualifying Sales: Definition of what constitutes a qualifying sale for commission purposes

8. Performance Targets: Any minimum performance requirements or quotas that must be met

9. Adjustments and Clawbacks: Conditions under which commissions might be adjusted or recovered

10. Duration and Review: Period for which the commission structure is valid and when it will be reviewed

11. Acknowledgment: Space for employee signature and date to confirm understanding and acceptance