In broker salary and commission deals, the first $2m can pay nothing.

Cost recovery in a broker salary and commission deal means the business keeps the commission a broker generates until it covers their base and costs, then pays a share. One principal set that line at the first $2m settled each month. A new broker reading the offer sees one number that pays in year one, the base.

The bottom line: Every base-plus-commission broker seat has a point where the broker’s settlements have paid back their own salary and desk costs. FinTalent’s read, from both sides of the table, is that where that point sits, and whether the offer says it in dollars, decides who applies before any interview does.

The principal was designing their first salaried broker seat when they talked the idea through with us. “The first 2 million he settles, he doesn’t get paid anything,” they said. “That just pays back his salary plus some of the costs.” They put those costs at about three grand a month, plus marketing and systems. In their first version the line was monthly and a short month carried into the next one. “If you settle 1 million, you need to settle 3 million the month after before you get any commission.”

Nobody on that call was being tight. The number was the seat paying for itself. It is also the number a broker does the maths on, and the two readings of it sit a long way apart.

How does cost recovery work in a mortgage broker salary and commission structure?

The MFAA’s own factsheet on how brokers are paid says commission is revenue for a broking business, not a broker’s take-home pay. Out of it come aggregator fees, staff salaries, regulatory levies, rent, insurance, software and clawback provisions, and “only once all these costs are paid, can a broker pay themselves”. The same factsheet puts upfront commission at generally 0.65 to 0.70% of the loan and trail at generally 0.15% a year. Our breakdown of what broking roles really pay covers how the two stack.

A self-employed broker runs that sum on their own business. In a salaried seat the principal runs it, and the broker’s salary becomes one of the costs. The recovery line is wherever the business decides those costs have been covered. In our conversations with principals and brokers it gets written three ways.

From recorded conversations and correspondence with principals and brokers, anonymised.

Viridian Lending, with 27 brokers settling more than $1 billion a year at the time, described its version to MPA in August: a proper base salary with the usual entitlements, a debits-credits model on top, and an uncapped split tied to experience and tenure.

All three recover the same costs. The difference a broker cares about is whether the base is a wage they keep if they miss the line, or an advance they pay back out of later commission, and our guide to what your split is really buying walks through writing either one down.

What does the first $2m a month pay for?

Start at the principal’s desk. The FinTalent salary guide uses the MFAA’s range of 0.65% to 0.70% for upfront, and the sums below take the bottom of it, so they lean conservative. At 0.65%, $2m settled in a month generates about $13,000 of upfront, or $156,000 a year.

Now the seat. The salary guide puts a broker with two to five years at $85,000 to $110,000 base nationally, so take $90,000. The super guarantee has been 12% since 1 July 2025, so the salary costs $100,800 a year, or $8,400 a month, and since 1 July 2026 the super goes out every payday. Add $3,000 a month of running costs, the principal’s own figure before marketing and systems, and the seat costs about $11,400 a month.

Arithmetic on 0.65% upfront, the bottom of the MFAA range the FinTalent FY26/27 salary guide uses, a $90,000 base plus 12% super, and $3,000 a month of running costs. Upfront only, before trail and before any clawback.

On those numbers the $2m line sits about $1,600 a month above break-even. It is a fair line.

The trail is where the business earns its return on the seat. “Typically you’re not going to get trail if you’re on a salary,” the same principal said. “Simple as that.” At 0.15%, $2m a month of new loans adds up to about $36,000 a year of trail for as long as those loans stay on the book, less as they are paid down, and in the principal’s design all of it stays with the business.

Their worry was the months below the line. They did not want to be “bleeding money when he’s only settling, you know, 500k or a million in the beginning”. They also saw the other argument coming, a broker saying a handful of leads could never make $2m, and wanted lead and appointment numbers agreed up front so a short month could be read fairly. If leads are part of your offer, settle what ‘leads provided’ means before you set the line.

From the desk that pays the salary, the first $2m is the seat covering its own cost, and the trail on those loans is the return.

How does a new broker read the same offer?

Run it from the broker’s chair and the question becomes how far $2m a month sits from normal. The MFAA’s Value of Mortgage and Finance Broking 2025 report put the average at $1.4m settled a month per broker in 2024. The MFAA’s State of Mortgage and Finance Broking Report 2026 counted $495.55 billion of residential settlements across 24,116 brokers in 2025, which works out at about $20.5m each, or $1.7m a month. Across the aggregators that supplied data, the same report put median gross upfront revenue per broker at $126,941.

A $2m monthly line needs $156,000 of upfront a year before the broker earns a dollar of commission. That is more upfront than the median broker in the country generated in 2025. A new hire has to out-settle the typical Australian broker before the offer pays anything above the base.

The table above shows the other half of it. At the 2024 average of $1.4m a month, 0.65% upfront comes to $9,100, against $8,400 a month for a $90,000 base plus super. An average broker in that seat covers their own salary and about a quarter of the running costs.

Timing stretches it further. The MFAA factsheet says it can be up to 90 days after settlement before a broker receives the commission, and that sits on top of building a pipeline. The MFAA’s own 2026 diversity survey, with 442 responses, named variable or commission-based income, and the time and support it takes to build a client base, as the most prominent barriers to entering and progressing in broking.

One broker described this kind of seat from the inside. They were on a $120,000 base. “The revenue target is $250,000 to break even and then it’s 25% on there,” they told us. By their count they would reach about $41m in 18 months, roughly $2.3m a month and well above the national average, and they expected “probably an extra $6,000 in commission” for the year. They were writing above the $2m line and their upside was about six grand.

For the broker, the base is most of year one. That makes the base the offer they are reading, whatever the commission table says.

Who says yes when the first $2m pays nothing?

The people weighing these offers say plainly what decides it for them. A broker’s associate looking at their next role told us a lot of their mates in the same job “just kind of live out at home”, so a slow week is “not the end of the world”. Their position was different. “I got bills to pay, I got rent I gotta pay.” They were open to working into commission and preferred a higher base while they did.

A broker was invited into a business run by someone they knew, and at the time had “just bought a house”. Their condition was plain. “I’m going to need to come in on a salary if that’s all right.” Later, with the commissions in front of them, they moved to commission only on a higher split. The base covered the start, which is the stretch a recovery line makes hardest.

Principals weigh the same trade from the other side. One principal hiring experienced people told us they would rather hold the base and add a bonus than lift the base. “Back yourself and drop in a bonus.” Their reason was that a bigger base would have them “breathing down your neck to get that return on investment in say three to six months time”. The same principal pays key people their short-term incentive even when they finish $5m short of target. “I’ve always paid it.”

Our guide to the experience you can afford works through the same trade from the hiring side, where a cheap base and no training keep producing the same failed hire. MPA, reporting on Viridian’s model, noted that figures in its own coverage put first-year broker failure at anywhere from 50% to 75%.

A seat that pays nothing above the base until the broker beats the national average fills with people who can live on the base for a year, or who bring a book with them. Most new brokers come out of banking and build a book from scratch, as where new brokers come from sets out, and the case for commission-only broking we made in 2024 was written for the self-starter who can ride out uneven income early on.

How do you write the recovery line into an offer?

Five things, each one a question a broker will ask if the offer leaves it out.

1. Say the line in dollars, months and loans. “Commission starts above $2m settled in a month” is honest. Add what it means in loans. The MFAA counted 838,815 residential loans for $495.55 billion in 2025, about $590,000 each, so $2m is three to four settled loans every month.
2. Say what happens to a short month. On the call where the $2m line was designed, the business’s second principal wanted the carry-forward limited to probation, “so he doesn’t feel like I’m doing all this work the first couple of months for nothing”. That is a principal building the broker’s fear into the design.
3. Say whether the base is a wage or an advance. One principal we work with sets it out in writing. The base and its super are advanced against the broker’s share and repaid out of it, so the total package always equals the share and the business’s cost is capped. Clawbacks come off the next commission run as they arise. A broker can check every line of that.
4. Say who keeps the trail and who wears the clawback. The MFAA’s 2026 report measured clawback at an industry level for the first time, a median of $11,442 per broker in 2025, up 16.5%, taken from five aggregators’ own medians rather than from individual brokers. Netted off commission, clawback pushes the line further out, and who wears the clawback covers the contract terms.
5. Check the base against the market before the split. The salary guide has the bands by city, and the broker earnings calculator shows upfront and trail at any volume.

Joe runs every FinTalent search himself, and on a recent mortgage broker search we built the principal an income calculator so candidates could see years one, two and three in dollars. Run your own base, super and desk costs against what your last hire settled in their third month.