Commissions and bonuses are two accepted mechanisms for compensating employees. Both are perceived by employees as additions to their salary, but legally they are entirely different components concerning their impact on the calculation of the employee's social benefits.<\/p>\n\n\n\n
What is a commission?<\/span><\/p>\n\n\n\n Commission is a payment for performing a specific job \u2013 usually a fixed percentage of a sale, profit, or income that the employee actually generated (e.g., a certain percentage of a sale made by a sales agent). Commission is considered As an integral part of salary <\/strong>And it is paid regularly according to the worker's output. Regulation 9 toSeverance Pay Regulations (Calculation of Severance Pay and Resignation Deemed Dismissal), 5724-1964<\/u><\/strong>, This reinforces the position and states that when an employee's salary is paid, in whole or in part, for the performance of specific work, based on a share of revenue or the quantity of output, the last salary for the purpose of calculating compensation will be the average salary of the last 12 months. In other words, commissions paid for ongoing work will be included in the compensation calculation, taking into account the average actual income.<\/p>\n\n\n\n In the ruling cc (local) 300048\/98<\/strong> Ovadiah Mark N. Hestor Ltd.<\/u><\/strong> It has been determined that commissions are a legitimate component of salary and therefore must be included in the calculation of severance pay, social benefits, overtime hours, and vacation day redemption. Israeli case law consistently and clearly establishes that commissions paid to an employee on a regular basis Even if they are not permanent<\/strong>, are considered part of the regular wage component.<\/p>\n\n\n\n