If your agency operates under a host agency that doesn't use Tern, you'll need to decide how to handle commission tracking to ensure accurate agent payouts and proper reporting.
Understanding the Commission Flow
When working under a host agency, commission typically flows like this:
Supplier pays commission to Host Agency (e.g., $1,000)
Host Agency pays your agency a percentage (e.g., 90% = $900)
Your Agency pays your agent their split (e.g., 90% of $900 = $810)
How to Enter Commission in Tern
Expected Commission Amount
When entering expected commission for bookings, your agents should enter the full amount the supplier will pay the host agency, not the reduced amount you'll receive. This will allow you to accurately report expected commission to your host.
Expected Commission Split
When entering expected commission, your agents should set their expected split percentage or commission type to the split they will expect from what your agency received when you reconcile commission.
While this will result in an overestimation of their expected commission, it will make it easier for you to accurately reconcile received commission later on.
Example:
If the supplier will pay $1,000 to the host, your agents should enter $1,000 as the expected commission.
If your agents is expecting an 80% split from you to them, they should enter 80% as their expected split, even though their total split from the host to you to them will be lower.
Note: You and your agents' expected commission amounts will not take into account your host's split, and will over-estimate your expected commission. While this is not ideal, it does make reconciliation easier later to ensure your agents get paid the correct split.
Received Commission
When you actually receive payment from your host agency, enter only the amount you received in the "Received Commission Amount" field.
The agent split set here should reflect their split between them and your agency, and will be applied to the actual amount received.
Example: If the host pays you $900 out of the $1,000 they received, enter $900 as the received commission. If your agent has a 90% split set up with you, their split should be 90% here.
This ensures:
Your agents get paid correctly based on what you actually received
Actual payouts are calculated on real money, not inflated amounts
How Agent Payouts Work
Using the example above:
Expected Commission: $1,000 (what you entered)
Received Commission: $900 (what you actually got from host)
Agent Split: 90%
Agent Payout: $900 × 90% = $810
Your agent receives 90% of what your agency actually received, which equals 81% of the original supplier commission (90% × 90% = 81%).
Important Considerations
Expected Commission Reports Will Be Higher
Your expected commission reports will show higher numbers than what you'll actually receive because they don't account for your host's cut.
Don't Adjust Agent Splits for Host Cuts
We don't recommend lowering individual agent splits to account for the host's cut. This can lead to underpaying agents because:
The reduced split gets applied to the already-reduced amount you received
This creates a "double reduction" that shortchanges your agents
Manual adjustments become complex and error-prone
Reconciliation Best Practices
Track both numbers: Keep records of both expected (supplier to host) and received (host to you) amounts
Communicate clearly: Make sure your team understands why expected and received amounts differ
Regular reviews: Periodically review host payments against expected amounts to catch any discrepancies
Summary
Expected Commission: Enter the full amount the supplier pays the host
Received Commission: Enter only what your agency actually receives
Agent Payouts: Will be calculated correctly based on received amounts
Reports: Expected commission reports will be higher than actual receipts, which is normal
This approach ensures accurate agent compensation while maintaining clear reporting and reconciliation processes with both your host agency and suppliers.
Still have questions? Reach out and we’re happy to walk through specific examples with you.