Referral Commission
A percentage-based payment to a referrer, calculated on the value of the deal they introduced.
Definition
A referral commission is a payment calculated as a percentage of the transaction value that results from a referral. Unlike a fixed referral reward, a commission scales with deal size — meaning the referrer earns more when the deal is larger. This structure is common in high-value sectors like real estate and wholesale.
Referral Commission in the UAE
In Dubai, referral commissions are most prevalent in real estate (where 1–2% of the property sale price is not unusual) and wholesale trading (where a percentage of the first order value is paid). In the UAE's VAT framework, referral commissions received by businesses may be subject to 5% VAT. Individual referrers who are not VAT-registered are generally not required to charge VAT on referral income.
How It Works
- 1
The business defines the commission rate (e.g. 1.5% of the contract value) in their Listi.ae listing.
- 2
The referrer introduces a client and the deal closes.
- 3
The commission is calculated based on the final confirmed transaction amount.
- 4
Payment is made directly by the business, typically after the money is received from the client.
Example (Dubai)
A referrer introduces a buyer to a Dubai property broker. The property sells for AED 1,200,000. At a 1.5% referral commission, the referrer earns AED 18,000 — paid after the transfer is registered.
Frequently Asked Questions
Is a referral commission the same as a referral fee?
A referral fee is typically a fixed amount; a commission is percentage-based. Both are forms of referral reward. On Listi.ae, listings specify whether the reward is fixed (e.g. AED 1,000) or percentage-based (e.g. 2% of sale).
When is a referral commission paid in UAE real estate?
Most real estate brokers pay after the property transfer (Form F completion) or after receipt of the client's funds. Some pay on exchange of contracts. The specific timing is always stated in the listing terms.
Related Terms
Referral Reward
Any payment — cash, voucher, or bonus — given to someone for successfully introducing a new client.
Percentage Commission
A referral reward calculated as a percentage of the deal or contract value.
Referral Program
A structured system where a business pays individuals for introducing paying clients.
Real Estate Referral (UAE)
An introduction of a buyer, seller, or tenant to a licensed Dubai property broker, rewarded with AED cash.