Real Estate Agent Fees & Commission in Ontario

Understanding how real estate commissions work in Ontario is critical — whether you're planning to become an agent or you're a consumer researching costs. Here's a complete breakdown of how agent fees work in 2026.

How Real Estate Commission Works in Ontario

Real estate commission in Ontario is not regulated by law — it's negotiable between the seller and their listing brokerage. However, there are standard industry practices:

• Total commission: Typically 4-5% of the sale price
• Split between sides: Usually divided equally between the listing brokerage and the buyer's brokerage (2-2.5% each)
• HST applies: 13% HST is charged on commission in Ontario
• Paid by the seller: Commission is deducted from the sale proceeds at closing

Commission Example

On a $700,000 home sale with a 5% total commission:

• Total commission: $35,000
• Listing brokerage: $17,500 (2.5%)
• Buyer's brokerage: $17,500 (2.5%)
• HST on total: $4,550
• Total cost to seller: $39,550

How Agents Actually Get Paid

The commission doesn't go directly to the agent. Here's the flow:

1. Commission paid to brokerage — The full commission goes to the registered brokerage, not the individual agent
2. Brokerage takes their split — The brokerage keeps a percentage (typically 10-30% for established agents, up to 50% for new agents)
3. Agent receives remainder — The agent gets their share, minus any desk fees or transaction fees
4. Agent pays expenses — Marketing, insurance, licensing fees, MLS dues, and taxes come out of the agent's share

Commission Split Examples

On that same $700,000 sale, here's what an agent on each side might actually take home:

• Their brokerage receives: $17,500
• 70/30 split (experienced agent): Agent gets $12,250
• 50/50 split (new agent): Agent gets $8,750
• After expenses (est. $2,000): $6,750 - $10,250 actual take-home

Changes Under TRESA

The Trust in Real Estate Services Act (TRESA) introduced important changes to how commissions work in Ontario:

• Buyer representation agreements — Buyers must now sign a representation agreement before their agent can show them properties
• Commission transparency — Agents must disclose their remuneration to clients
• Self-represented parties — TRESA defines the relationship and obligations when working with clients who aren't represented

Flat Fee vs. Percentage Commission

While percentage-based commission is standard, some brokerages offer alternative models:

• Flat fee listing: $3,000-7,000 fixed fee regardless of sale price. More common with discount brokerages.
• Tiered commission: Lower percentage on the first portion (e.g., 3% on the first $100,000, 1.5% on the balance).
• 100% commission brokerages: The agent keeps 100% of their commission but pays a monthly desk fee and per-transaction fee to the brokerage.

What New Agents Should Know

If you're planning to become a real estate agent, understanding the commission structure is essential for financial planning:

• You won't earn commission until you close your first deal — This can take 3-6 months for new agents
• Your split improves over time — As you build a track record, you can negotiate better splits or switch to a 100% commission brokerage
• Budget for startup costs — Between licensing costs, MLS fees, insurance, and marketing, plan for $5,000-10,000 before your first commission check
• Real estate is self-employed income — You'll need to set aside 25-30% for income tax and CPP contributions