If your commission was reduced or withheld because another team rejected a deal, application, or sale you helped bring in, you are asking a very common question in the Philippines. Many employees in sales, lead generation, BPO, recruitment, insurance, real estate, and similar roles experience this. The answer is not a simple yes or no. It depends on how your commission plan is written, when the commission is considered earned, and whether the deduction follows the strict rules of Philippine labor law.

This article explains the rules clearly so you can understand your situation and know what to do next.

Commissions Are Considered Wages Under Philippine Law

Under the Labor Code of the Philippines (Presidential Decree No. 442), particularly Article 97(f), “wage” includes remuneration or earnings computed on a commission basis. This means commissions are protected like regular salary. Employers cannot treat them as discretionary bonuses that can be taken away arbitrarily.

Because commissions form part of wages, any deduction or non-payment is governed by the same strict standards that protect employees’ pay.

The Strict Rules on Deductions from Wages and Commissions

Article 113 of the Labor Code states that no employer may deduct from an employee’s wages except in very limited cases:

Insurance premiums advanced by the employer (with the employee’s consent)
Union dues (with proper authorization)
Deductions authorized by law or by regulations issued by the Secretary of Labor and Employment

In 2018, the Department of Labor and Employment issued Department Order No. 195, Series of 2018 (DO 195-18). This added another ground: deductions with the employee’s written authorization for payment to the employer or a third party, provided the employer does not receive any direct or indirect pecuniary benefit from the transaction itself.

Even with written authorization, deductions must still be reasonable, clearly documented, and must not effectively bring the employee’s net pay below the applicable minimum wage. Arbitrary or punitive deductions remain illegal.

When Is a Commission Considered “Earned”?

This is the most important question for “rejects by another team” situations.

A commission becomes earned (or “vests”) only when the conditions set in your employment contract, commission or incentive plan, or established company practice are met. Common vesting points include:

Signing of the contract or purchase order
Delivery of goods or completion of service
Client payment or full collection
End of a cancellation or return period
Final approval or acceptance by another department or team

If your plan clearly states that commission is payable only upon successful processing or approval by the underwriting, quality control, fulfillment, or processing team (the “another team”), and that team rejects the transaction, the commission is usually not yet earned. In this case, there is no deduction — simply nothing is due.

However, if the plan pays commission upon the initial sale or your completed work, and only later applies a chargeback or clawback when another team rejects it, the rules become stricter.

Is It Legal to Deduct Commission for Rejects by Another Team?

It can be legal in some cases and illegal in others. Here is a practical breakdown:

Likely legal when:

Your written commission plan or incentive policy explicitly states that commission vests only after approval or non-rejection by the other team.
The reject happens before the vesting point.
The policy includes a reasonable, time-limited window (for example, 30 or 60 days) for any chargeback.
The deduction or non-payment is applied consistently and transparently.
The reject is not caused by the company’s own fault or bad faith (such as processing errors or unreasonable delays by the other team).

Likely illegal or highly questionable when:

There is no clear written policy making approval by the other team a condition for earning the commission.
The commission was already paid or had vested, and the company tries to claw it back without proper basis or written authorization.
The reject or cancellation was caused by factors beyond your control (for example, another team’s mistake, system error, or company policy change).
The deduction is used to shift normal business risks or losses onto employees.
The policy is vague, applied retroactively, or used inconsistently.

Philippine labor tribunals generally construe ambiguous compensation plans in favor of the employee. They also look at whether the employee had a real opportunity to understand the rules and whether the deduction is fair.

Common Real-Life Scenarios

Loan or credit sales roles — A sales officer brings in a client and completes paperwork. The credit or underwriting team rejects the application. If the commission plan says commission is earned only on approved and booked loans, non-payment is usually valid. If the plan pays on “submitted” applications and later deducts for rejects, the deduction needs strong contractual support.

BPO or lead generation teams — One team qualifies leads or sets appointments; another team handles closing or processing. Rejects by the processing team often trigger disputes. Clear vesting language in the incentive plan protects both sides.

Insurance or financial products — Agents earn commission on policy issuance, but underwriting rejection or early lapse within a chargeback period is common. Most legitimate plans allow chargebacks only within a defined window and only for reasons not attributable to company fault.

E-commerce or retail fulfillment — An order is “sold” but later rejected by the warehouse or quality control team for stock issues or damage. If this risk is clearly placed on the seller in the plan, deduction may stand. If not, it is often challengeable.

In all these situations, the written plan and how it was communicated to you matter enormously.

What to Do If Your Commission Was Deducted or Withheld

Review your employment contract, commission or incentive plan, and employee handbook in detail. Look specifically for sections on vesting, chargebacks, rejects, approvals by other teams, and payout conditions.
Send a polite but formal written request (email is fine) to HR or payroll asking for: (a) the exact computation of your commission, (b) the specific policy provision they are relying on, and (c) copies of any rejection notice or documentation from the other team.
Compare the explanation against your actual plan. Note the date you received or acknowledged the plan.
If you believe the deduction lacks clear basis or violates the rules, gather your documents (contract, plan, payslips, emails, rejection memos) and file a complaint through the Single Entry Approach (SEnA) at the nearest DOLE Regional or Field Office. SEnA is free, fast, and aims for voluntary settlement.
If SEnA does not resolve the issue, you can proceed to the National Labor Relations Commission (NLRC) for a formal money claim. Money claims generally prescribe after three years.

Act promptly and keep records of all communications. Many cases are settled once the employer is required to show the written policy and computations.

Documents That Help Your Case

Signed employment contract and commission/incentive plan (or acknowledgment receipt)
Payslips showing previous commission payments and any deductions
Written communications about the specific deal or application
Any rejection notice or internal memo from the other team
Company handbook or policy manual (if it contains commission rules)

Frequently Asked Questions

Can my employer deduct my commission if another team rejected the deal even though I completed my part correctly?
It depends on whether your written commission plan makes successful approval by that team a clear condition for earning the commission. If it does, and the reject happened before vesting, the commission is usually not due. If the plan does not say this clearly, or if the commission had already vested, the deduction is much harder to justify.

What if the rejection was caused by an error or slow processing by the other team?
This strengthens your position. Policies that punish employees for mistakes or delays by other departments or the company itself are often viewed unfavorably. The deduction should not shift ordinary business risks onto you.

Is it legal if the commission was already paid into my account?
Once paid, recouping it through a later deduction is treated as a wage deduction and must comply with Article 113 and DO 195-18. It is easier for the employer to justify if the plan clearly treats the initial payment as an advance against final earned commission and includes a written chargeback mechanism you acknowledged.

How long can the company wait before charging back a commission?
There should be a reasonable, defined period stated in the policy (commonly 30–90 days). Open-ended or very long clawback periods are more likely to be challenged.

Do I have to sign a separate form every time they want to deduct commission?
Not necessarily for every transaction if you have already acknowledged a clear commission plan that includes chargeback rules. However, for many other types of deductions, specific written authorization is still required under DO 195-18.

What happens if I resign before the commission is paid or before a possible chargeback period ends?
Commissions that had already vested before your resignation are generally still due. Unvested or conditional commissions may not be payable, depending on the clear terms of your plan. Blanket forfeiture upon resignation is risky for employers if the commission was already earned.

Can these deductions push my total pay below the minimum wage?
No. Employers must ensure that after all lawful deductions, the employee still receives at least the applicable daily minimum wage for days worked, plus other mandated benefits. Deductions that effectively violate minimum wage standards are illegal.

Are the rules different for foreigners working in the Philippines?
The Labor Code and its rules on wages and deductions generally apply to all employees working in the Philippines, regardless of nationality. Foreigners on work visas enjoy the same wage protections.

Where can I get help checking if a deduction is legal?
Start with the free Single Entry Approach (SEnA) at your nearest DOLE office. It is designed exactly for money claims like unpaid or deducted commissions and does not require a lawyer to file.

Key Takeaways

Commissions are wages under the Labor Code and enjoy strong legal protection against arbitrary deductions.
Whether a deduction for a reject by another team is legal depends primarily on the clear, written terms of your commission or incentive plan.
If the plan makes approval by the other team a condition for earning the commission, non-payment upon rejection is usually valid.
Once a commission has vested or been paid, clawbacks are allowed only when supported by a clear policy, proper documentation, and compliance with deduction rules (including DO 195-18 when applicable).
Ambiguities in commission plans are generally resolved in favor of the employee.
If you believe a deduction was unfair or lacked basis, document everything and use the free DOLE SEnA process to seek resolution.

Understanding your specific commission plan is the single most important step. Review it carefully, ask HR for written explanations when needed, and do not hesitate to use the government’s free mediation services if something feels wrong. Many employees successfully recover withheld commissions once the lack of clear contractual basis is pointed out.