You Hit Every KPI… Then Your Commission Disappeared. Can Your Company Really Do That?

“I closed the deal.”

“I hit every monthly KPI.”

“The client signed the contract.”

“Then my company changed the commission scheme.”

For many employees, commissions and incentives are more than just extra income. They are designed to reward performance, recognise hard work and motivate employees to achieve business goals.

But what happens when the rules suddenly change?

Can an employer remove a commission scheme?

Can they stop paying incentives?

Can they change the policy halfway through the month?

Or even recover commission that has already been paid?

The answer is rarely a simple “yes” or “no”. Much depends on the employment contract, the commission or incentive policy, the facts of the situation and the applicable employment laws.

Let’s look at some common scenarios.

Scenario 1: “The commission scheme has been abolished.”

For years, your company rewarded employees who achieved their monthly KPIs.

Meet your target?

You earned commission.

Exceed your target?

You earned even more.

Then one day, management announces:

“From next month onwards, there will no longer be any commission or incentive scheme.”

The sales targets remain.

The workload remains.

Employees continue bringing in new customers.

The only thing that disappears is the additional reward.

Many employees immediately ask: “Can they simply do that?”

The answer depends on whether the commission formed part of the employment contract, whether it was discretionary, whether the employer reserved the right to amend or withdraw the scheme, and what the applicable employment law provides.

Scenario 2: “You already closed the deal.”

Imagine spending weeks negotiating with a client.

The client signs the agreement.

Everything has been completed.

Before payday arrives, the company announces a new commission policy.

Suddenly you’re told: “This deal no longer qualifies for commission.”

Or perhaps: “The new commission rates now apply.”

Employees often wonder whether they should still receive commission for work already completed.

In many cases, the key question is when the legal entitlement to commission actually arose. The answer may depend on the employment contract, the commission policy, the timing of the sale and the applicable employment law.

Scenario 3: “The company paid your commission… then took it back.”

Sometimes the commission has already appeared in your payslip.

A few weeks later…

Payroll deducts the money.

Or asks you to repay it.

The reasons given might include:

• the customer cancelled the contract;
• the customer never paid;
• a refund was issued;
• there was an accounting error;
• duplicate commission was paid; or
• the company’s clawback policy applies.

Many organisations include clawback clauses, allowing certain commission payments to be recovered under specific circumstances.

Whether such a clawback is enforceable depends on the contractual terms and the applicable law.

Scenario 4: “The incentive scheme disappeared.”

Not every incentive relates to sales.

Many companies reward employees in partnership, marketing, customer success, operations or business development teams for achieving KPIs.

Perhaps your department used to receive monthly incentives for:

• achieving departmental KPIs;
• bringing in strategic partners;
• generating qualified leads;
• meeting project milestones; or
• exceeding performance targets.

Then management announces that the incentive programme has ended.

No replacement.

No salary adjustment.

No alternative benefits.

Employees continue delivering the same results, but without the financial recognition they had come to expect.

Whether an employer can make such a change depends on the contractual arrangements, company policies and the applicable employment laws.

Scenario 5: “The rules changed halfway through the month.”

This situation can be particularly frustrating.

Employees begin the month working towards a published incentive target.

Halfway through the month, the company changes the rules.

Perhaps:

• the commission percentage is reduced;
• the KPI target is increased;
• qualifying products are removed; or
• the incentive scheme is withdrawn entirely.

Employees naturally ask whether changing the rules after work has already been performed is fair or even lawful.

Again, the answer depends on the employment contract, the terms of the incentive scheme and the applicable legal framework.

Scenario 6: “The targets stayed. The rewards changed.”

A company decides to remove or significantly reduce its commission or incentive scheme.

However, employees are still expected to meet the same KPIs, close the same number of deals or achieve the same performance targets.

This often raises practical, not just legal questions.

From an employee’s perspective, some may ask:

• Will my additional effort still be recognised?
• Has my overall remuneration effectively been reduced?
• Will this affect my motivation to exceed expectations?

From an employer’s perspective, the decision may be driven by legitimate commercial reasons, such as restructuring, rising costs, changing business priorities or the need to adopt a different remuneration model.

Beyond the legal position, employers should also consider the potential impact on employee engagement, morale and retention. Employees who feel that performance is no longer recognised may become less motivated, while employers may need to explore other ways of rewarding or recognising high-performing staff.

Whether such changes are legally permissible depends on the employment contract, company policies and the applicable employment laws. Equally important is how those changes are communicated and implemented within the organisation.

Why do companies change commission or incentive schemes?

Employees often assume the employer is simply trying to save money.

Sometimes that may be true.

However, businesses may also have legitimate commercial reasons for reviewing their reward structures, including:

• rising operating costs;
• declining profits;
• restructuring;
• changes in business strategy;
• economic uncertainty;
• introducing a different remuneration model; or
• replacing commission with higher fixed salaries or other employee benefits.

Businesses need flexibility to adapt to changing market conditions.

However, changes should ideally be communicated clearly, implemented fairly and reviewed carefully before taking effect.

Employees also have legitimate expectations

From an employee’s perspective, commissions and incentives are often more than just a bonus.

For many, they form a meaningful part of their monthly income.

Some employees accepted their role because of the advertised commission structure.

Others have consistently exceeded targets based on the expectation that strong performance would continue to be rewarded.

When those incentives suddenly disappear, the impact may extend beyond finances.

It can affect morale, motivation, employee engagement, retention and trust in management.

Even where an employer has the legal right to change a reward scheme, the way those changes are introduced can significantly influence workplace relationships.

Is it automatically illegal?

Not necessarily.

Before jumping to conclusions, several important questions should be considered:

• Is the commission contractual or discretionary?
• Is there a written commission or incentive policy?
• Does the employment contract allow changes?
• Is there a clawback provision?
• When did the employee become legally entitled to the commission?
• Were employees properly informed of the changes?
• Does the applicable employment law impose any restrictions?

The answers to these questions often determine whether a dispute may arise.

What should employees do?

If your commission or incentive changes unexpectedly, avoid making assumptions or making decisions based purely on emotion.

Instead, consider:

• reviewing your employment contract;
• checking the written commission or incentive policy;
• asking when the new policy takes effect;
• clarifying how completed deals or ongoing work will be treated;
• keeping records of KPIs, sales, emails and written promises; and
• seeking independent legal advice if you remain uncertain about your rights.

Sometimes the issue is simply a misunderstanding.

Sometimes there may be genuine legal questions that deserve closer examination.

What should employers do?

Changing a commission or incentive scheme may make sound commercial sense, but poor implementation can create unnecessary disputes.

Before making changes, employers should consider:

• reviewing existing employment contracts and commission policies;
• ensuring the proposed changes comply with applicable employment laws;
• communicating the reasons for the changes clearly and transparently;
• considering how completed transactions and ongoing work will be treated;
• giving reasonable notice where appropriate; and
• documenting any revised commission or incentive scheme.

A carefully managed transition can help preserve trust while allowing the business to respond to changing commercial realities.

The legal position differs from country to country

Employment laws vary across jurisdictions.

A commission or incentive policy that is enforceable in one country may not be enforceable in another.

Employers operating across multiple jurisdictions should ensure that their reward structures comply with local employment laws.

Employees should also avoid assuming that workplace practices from one country automatically apply elsewhere.

Final thoughts

Commission and incentive schemes exist to reward performance, recognise achievement and encourage business growth.

When those schemes change or disappear, employees naturally question whether the decision is fair or lawful.

At the same time, businesses may need to review their remuneration structures because of changing financial conditions, commercial realities or strategic priorities.

A more useful question may be:

Was the change made fairly, transparently and in accordance with the employment contract and the applicable law?

That is often where the real legal answer lies.

Need help understanding or preparing employment-related documents?

Whether you’re an employer developing commission or incentive policies, or an employee trying to better understand your employment documents, having clear and well-organised documentation can help reduce misunderstandings and disputes.

LexMesos Solutions offers AI-Powered Drafting and Preliminary Document Checks to support individuals and businesses with employment-related documentation. Where formal legal advice or representation is required, lawyer-led services are available separately through our panel lawyers.

Keywords: commission scheme, incentive scheme, employee commission, commission policy, KPI incentive, employment contract, bonus policy, clawback clause, employment rights, workplace incentives

Disclaimer: This article is for general informational purposes only and does not constitute legal advice. The legal position relating to commissions, incentives, bonuses and employment rights varies depending on the employment contract, company policies and the laws applicable in each jurisdiction.

10 July 2026