A clawback in sales occurs when a rep has received commissions from a sale, but then the customer ends the contract within a certain period of time. When the company “claws back” the commissions paid out to the rep from this deal via a paycheck deduction, that is called the commission clawback. 

Other terms tied to clawbacks include “clawback provision” or “clawback clause.”

The clawback provision or clawback clause refers to the section in the commission agreement that defines clawback scenarios and when the company is justified to take back earnings from a rep, via commissions or bonuses. 

For help putting together the clawback provision portion of your sales commission agreements, we have downloadable templates.

We don’t love clawbacks, but they are important to protect the business in case of a contract folding that is completely out of your organization’s control. 

Additionally, if you want to automate the tracking and calculations of clawbacks, consider automating it through QuotaPath. Our systems of record becomes a single source of truth for all earnings and compensation information and can flag for you when a deal needs to be clawed back or resolved. To see it for yourself, sign up for a free 30-day trial

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