Let's say you have a franchise fee, referral fee, or tax that you take off the top before you split the agent's commission. You can set this up on the disbursement by adding a pre-commission debit:
(fig.1)
You'll choose After for the question: "Calculate agent's commission before or after this item?" if you want to split the agent's commission by the brokerage gross commission amount minus the deduction.
This will lower the gross commission by the amount of your fee, and then split the agent's commission on the lower amount.
Include this debit in the Net Amount Due to Brokerage (Including Co-Broker)
This setting will determine if the debit is included in the 'Net Amount Due to Brokerage' line item in the 'Final Commission Breakdown' section of the commission disbursement.
If 'Include this debit in the Net Amount Due to Brokerage' on a Pre-Commission debit item is set to 'Yes' then the debit is included in the 'Net Amount Due to Brokerage' meaning the Brokerage net is not decreased. Because the money is income for the Brokerage it is included in the Brokerage net.
If the 'Include this debit in the Net Amount Due to Brokerage' on a Pre-Commission debit item is set to 'No', then the 'Net Amount Due to Brokerage' is decreased by the debit amount. Because this is money for an outside source, it will not be included in the Brokerage net.
(fig.2)
Instead of showing $14,850 due (fig.1) to the brokerage it shows $14,107.50.
That's because it deducted the 5% franchise fee you added which is $742.50 from the total due to the brokerage.
If you want this amount included in the total due to the brokerage then you'll select Yes to the question, "Include this credit/debit in the Total Due to Brokerage?"
This scenario assumes that you want to collect the full commission amount, including the amount of the fee because you'll be paying the fee out separately, or keeping it as additional income.
However, you still want to use the lower gross commission, after the fee was deducted to split the agent's commission.
(fig.3)
Reduce the Total Amount Due to Broker
Note that by default, this field is set to "No". If you would like to change the "Total Amount Due to Broker", set to "Yes"
When set to "Yes", the debited amount will decrease the amount of the "Total Amount Due to Broker" by the amount noted
When set to “Yes” in conjunction with “Calculate agent’s commission before or after this item?” set to “Before”
This debit should reduce both the Total Amount Due to the Broker AND the Net Amount Due to the Broker. This solves the use-case of the brokerage covering the fee amount, because they are paying the vendor from the closing table, without impacting Agent commission.