A licensed real estate salesperson is legally required to work under the supervision of a licensed broker. All compensation related to real estate activities, including commissions and bonuses, must be paid by the client (e.g., seller) to the brokerage firm. The supervising broker then pays the salesperson their agreed-upon share. This structure ensures regulatory compliance, proper accounting, and adherence to agency law. A salesperson cannot legally receive compensation directly from a client or another licensee.

A. Salespersons are prohibited from receiving compensation directly from any party to a transaction; all funds must first be paid to their supervising broker.

B. Any referral fees must be paid from one broker to another broker, who then compensates their respective salesperson. Direct salesperson-to-salesperson payments are not permitted.

D. While licensees can agree to split commissions, the funds must be disbursed through their respective brokers, not paid directly between the salespersons.

1. California Department of Real Estate. (2023). Reference Book - A Real Estate Guide. Chapter 16, "Operation of a Real Estate Broker's Office," Section: Salesperson's Compensation. The guide states, "A real estate salesperson...cannot...accept compensation from any person other than the broker under whom he or she is licensed." This directly supports the principle that all payments must flow through the broker.

2. Jennings, M. M. (2017). Real Estate Law (11th ed.). Cengage Learning. Chapter 5, "The Real Estate Brokerage and Listing Agreements," Section 5-3d, "Who Receives the Commission." This university textbook clarifies that the commission is technically earned by and paid to the brokerage entity (the broker), which then compensates the salesperson according to their employment or independent contractor agreement.

3. Floyd, C. F., & Allen, M. T. (2018). Real Estate Principles (11th ed.). Dearborn Real Estate Education. Chapter 5, "Real Estate Brokerage," Section: "Compensation." This text explains the legal and practical framework where commissions are paid to the sponsoring broker, who is legally responsible for the transaction and for compensating the affiliated salespersons.