How to Split Marketing Costs Between a Team and Its Agents
Quick answer: Pick one model for sharing marketing costs, write it into the team agreement, run all money through the broker, and review it once a year against what each side spends. The five common models are a lower split on team leads, a monthly marketing fee, a pay-at-close lead fee, a shared cost pool and opt-in programs. No survey says which is most common, so choose the one that covers your costs and still feels fair to agents.
On this page: Where teams are · Five models · Worked examples · Who pays what · The rules · Taxes · The agreement · When an agent leaves · Keeping it fair
Where teams are
- Teams are common and small. NAR’s 2026 Member Profile found 21% of Realtors work on a team, and the typical team has four members.
- Spending grows with size. The 2024 Teams Report from RealScout, T3 Sixty and Tom Ferry found most teams of two to five agents spend $1,000 a month or less on lead generation. Among teams of six or more, about 20% spend $2,500 to $4,999 a month and about 20% spend $5,000 to $9,999. RealScout sells team software and Tom Ferry sells coaching.
- Sphere still leads. The same report found about 80% of teams get most or many of their deals from their sphere of influence.
Those numbers shape the split. A small team with low lead spend needs a simpler model than a large team buying thousands of dollars of leads a month.
Five ways to split costs
| Model | How it works | Fits | Watch for |
|---|---|---|---|
| Lower split on team leads | The team pays for leads and marketing, and the agent takes a smaller share on team-generated deals. A common pattern is around 50/50 on team leads and 70/30 or better on the agent’s own. | Teams that buy leads and want one simple rule | Agents may feel the split is too big a cut if lead quality is low |
| Monthly marketing fee | Each agent pays a flat monthly amount toward shared marketing, tools and brand. | Teams with steady shared costs like the CRM, website and brand content | Fees add up for newer agents with few closings |
| Pay-at-close lead fee | The team takes a set percentage of commission on deals from team leads, the way pay-at-close portals such as Zillow Preferred work. | Teams that want costs tied to results | Needs clear rules on what counts as a team lead |
| Shared cost pool | Specific costs, like a mailer or event, are divided among the agents who use them, by share. | Teams with shared programs not every agent wants | Requires tracking and a monthly reconciliation |
| Opt-in programs | Agents choose to join a paid program, such as a quarterly farm mailer, and pay only if they join. | Teams with agents at different stages | Programs need enough participants to work |
Many teams combine two: a lower split on team leads plus a small monthly fee for tools, for example. Coaching models also use a graduated split that rises as an agent closes more deals. Icenhower Coaching’s example starts buyer’s agents at 50/50 and moves up at set unit counts. That is a coaching model, not survey data.
Worked examples
These use made-up numbers and leave out brokerage fees, which come off the top in most arrangements.
- Lower split on team leads. A $10,000 commission on a team lead at 50/50: the agent gets $5,000 and the team gets $5,000, which pays for the lead and marketing.
- Monthly fee plus a higher split. An agent pays $300 a month, $3,600 a year, and keeps 70% on every deal. At eight $10,000 deals, the agent earns $56,000 before fees, or $52,400 after.
- Pay-at-close lead fee. The team takes 35% of a $10,000 commission on a team lead, or $3,500, then splits the remaining $6,500 80/20. The agent gets $5,200.
- Shared cost pool. A $2,000 monthly farm mailer shared by five agents costs each $400 a month.
- Opt-in program. A quarterly mailer at $250 per agent per quarter; only agents who sign up pay.
Run your own numbers in the Team Marketing Budget spreadsheet, which splits each cost line between the team and its agents and shows each agent’s monthly share.
Who usually pays for what
| Usually the team | Usually the agent | Often shared |
|---|---|---|
| Brand, website and design | Personal sphere mailers and gifts | Listing photo and video |
| CRM and team tools | Personal brand content and ads | Client events |
| Team lead generation and ads | Personal cards and signs | Farm mailers |
| Marketing staff and leadership | Their own lead generation | Portal fees on team leads, through the split or a lead fee |
| Recruiting |
How to Build a Real Estate Team Marketing Budget covers setting the total.
The rules
This is general information. Have your broker and an attorney review your structure.
- Money runs through the broker. In many states, commissions and payments to licensees must go through the sponsoring broker. Massachusetts law does not recognize teams at all, and only the principal broker may pay affiliated licensees. In Washington, a team can add its own sharing arrangement, but the designated broker must have the chance to agree to it.
- Team leaders are supervisors in some states. Texas requires anyone who leads or supervises a team to be delegated as a supervisor in writing.
- Unlicensed staff are paid differently. Marketing staff, VAs and other unlicensed team members generally cannot be paid per closing or per referral in most states. Pay them a salary or hourly rate.
- Contractor status. Under IRS rules, licensed real estate agents are treated as self-employed for federal taxes when substantially all of their pay is tied to sales or other output, not hours, and they work under a written contract saying they are not employees. A monthly fee or a split does not change that, but paying agents hourly could.
- Lender co-marketing. If a lender or title partner helps pay for marketing, RESPA requires that payments reflect the fair value of the services performed and never pay for referrals. RESPA and Co-Marketing Rules covers it.
- Deductions from commission checks. Check your state rules and broker policy before deducting marketing fees from commissions.
Taxes
- Advertising is deductible. IRS Publication 334 lists advertising among the business expenses a self-employed person can deduct on Schedule C, as long as it is ordinary and necessary for the business.
- Fees paid to the team for marketing are likely deductible to the agent as a business expense too. Keep the agreement and statements as records.
- 1099 reporting changed. For payments made on or after January 1, 2026, the threshold for reporting payments on Form 1099-NEC rose from $600 to $2,000, with inflation adjustments starting in 2027. Some states set their own thresholds.
Talk to a CPA about how your team and agents should handle these.
What goes in the team agreement
NAR’s guidance on team agreements recommends covering compensation, how revenue and expenses are divided, who owns the team name and client lists, and what happens when a member leaves or the team dissolves. The broker should have a copy. At minimum, cover:
- The split on team leads and on agent-generated leads
- Any monthly fee, what it covers and when it is due
- Any pay-at-close lead fee and what counts as a team lead
- Shared programs and how costs are divided
- Who pays for listing marketing, signs and photos
- How money flows through the broker
- Who owns leads, contacts, the team name and accounts
- What happens to pending deals, leads and unpaid fees when an agent leaves
- How and when the structure is reviewed
When an agent leaves
- Pending deals close through the brokerage of record, and the agent’s share is paid under the departure terms.
- Team-generated leads usually stay with the team. Agents usually keep their personal sphere.
- Unpaid fees and shared programs should be settled under the agreement, not negotiated at the door.
- Write it down first. In 2019, Washington, D.C., team leader Jill Schwartz sued Compass and three former team members over broken agreements and listings. She later dropped her claims against Compass, and one team member countersued. Disputes like that are why the departure terms belong in writing before anyone joins.
Building a Team Brand Under a Franchise Brokerage covers what a team keeps if the whole team moves.
Keeping it fair
Economics matter to agents. In Real Brokerage’s June 2026 survey of its own agents, 39% named commission and economics as the top factor in choosing a brokerage. Real is a revenue-share brokerage, so read that with its model in mind.
Agents rarely leave over the size of a split alone. They leave when the split feels bigger than the value they get. Keep it fair by:
- Showing the value. Each quarter, share what the team spent on leads, marketing and tools, and what agents got from it.
- Tracking lead quality. If team leads do not close, the split on them will feel unfair. Tracking Lead Source ROI covers how to measure it.
- Reviewing once a year. Adjust the split or fees when costs or results change.
- Rewarding growth. A split that improves with production gives agents a reason to stay.
Why Agents Leave Brokerages covers retention more broadly.
Key takeaways
- Choose one model, or a simple combination, and write it into the team agreement.
- Run all money through the broker, and get the structure approved.
- Pay unlicensed staff by salary or hourly, never per closing.
- Advertising is deductible, and the 1099-NEC threshold is $2,000 for payments starting in 2026.
- Settle departure terms in writing before anyone joins.
- Show agents what their split or fees pay for, every quarter.
Free templates: the Team Marketing Budget, 90-Day Marketing Plan and Brokerage Marketing Audit.
Sources
Show all 12 sources
- National Association of Realtors, The Feature Sheet: 2026 Member Profile
- Real Estate News, Bigger teams spend more, but their agents make more (2024) and Inman, 11 key takeaways from the 2024 Teams Report (Teams Report data from RealScout, T3 Sixty and Tom Ferry)
- Icenhower Coaching, Managing and compensating buyer’s agents on real estate teams (a coaching company)
- Massachusetts Board of Registration, Frequently asked questions: real estate teams
- Washington Realtors, The framework for teamwork (2022)
- Texas Real Estate Commission, Are you a delegated supervisor?
- Internal Revenue Service, Statutory nonemployees and Publication 334, Tax guide for small business
- Avalara, One Big Beautiful Bill Act changes 1099 thresholds (2025)
- Holland & Knight, CFPB issues new RESPA Section 8 FAQs (2020)
- National Association of Realtors, Who’s legally responsible for real estate teams?
- Inman, Former Compass agent accuses team of mutiny in new lawsuit (2019) and Agent drops mutiny lawsuit against Compass (2020)
- Real Brokerage, June 2026 agent survey (a brokerage surveying its own agents)
Frequently asked questions
What is a typical team split on team-generated leads?
No survey tracks it, but a common pattern is around 50/50 on leads the team pays for and 70/30 or better on leads agents generate themselves. Coaching models often add a graduated split that rises as an agent closes more deals. Pick a structure that covers your lead and marketing costs and still leaves agents a fair share.
Can a team charge agents a monthly marketing fee?
Many do, but the money usually has to run through the broker. In Massachusetts, for example, only the principal broker may pay licensees, and state law does not recognize teams. Get your broker's approval and put any fee in the written team agreement.
Are marketing fees deductible for agents?
Advertising is a deductible business expense on Schedule C, and most agents are treated as self-employed for federal taxes under the IRS statutory nonemployee rules. Fees an agent pays the team for marketing are likely deductible too, but confirm with a tax professional.
What happens to marketing costs when an agent leaves the team?
Whatever the team agreement says. Spell out how unpaid fees, pending deals, team-generated leads and shared programs are handled before anyone joins. Pending deals close through the brokerage of record, and leads the team paid for usually stay with the team.