The Real Cost of a Real Estate Deal (What Most Canadian Agents Never Calculate)

You just closed a $500,000 sale. Your gross commission is $12,500.

You feel great. You should — you worked hard for that deal. But here's the question almost no agent asks after closing day:

How much of that $12,500 did you actually keep?

Not roughly. Not "most of it." The real number. After your brokerage split, transaction fees, HST remittance, marketing costs, and income tax.

Most agents can't answer that question. And that's a problem — because if you don't know what a deal is actually worth to you after all costs, you can't make intelligent decisions about which opportunities to pursue, how much to spend on marketing, or whether your business model is sustainable.

Let's break it down.

Step 1: The Brokerage Split

Your brokerage takes their cut first. Depending on your split arrangement, this can be anywhere from 5% to 30% of your gross commission — or structured as a flat monthly desk fee plus a smaller percentage.

On a typical 80/20 split:

$12,500 × 80% = $10,000 (your share)
$12,500 × 20% = $2,500 (brokerage share)

Some brokerages use tiered splits — your percentage improves as your annual GCI crosses certain thresholds. Others cap the brokerage's take at a fixed annual amount. Either way, if you don't know exactly where you sit in your split structure right now, you're estimating your income with a margin of error that can swing thousands of dollars.

Know your cap. If your brokerage caps at $20,000 per year and you've already paid $18,000, the next deal hits differently than if you've only paid $4,000.

Step 2: Transaction Fees

Many brokerages charge per-transaction fees on top of the split — a flat amount or small percentage on every closed deal.

A 1% transaction fee on your $12,500 commission costs $125. That sounds small. But over 20 deals in a year, it's $2,500. Some fee structures cap annually; others don't.

These fees are easy to ignore because they're small individually. Collectively, they're a line item that matters.

Step 3: HST/GST

If you're registered for HST, you're collecting HST on your commission and remitting it to the CRA. Per CRA, GST/HST registration is required once revenue from worldwide taxable supplies, before expenses, is over $30,000 in a single calendar quarter or over the last four consecutive calendar quarters. At or under that limit a person is a small supplier and registration is optional. Source: CRA, When to register for and start charging the GST/HST.

Per CRA, the GST/HST rate to charge depends on the province or territory where the supply is made: 13% HST in Ontario, 14% HST in Nova Scotia, 15% HST in New Brunswick, Newfoundland and Labrador and Prince Edward Island, and 5% GST in the other provinces and territories. Source: CRA: GST/HST calculator (and rates).

For an agent in Ontario, where the rate is 13%, the example looks like this:

$10,000 (your share after split) + $1,300 HST collected = $11,300 invoice to brokerage

The $1,300 is tax collected on the commission, not part of it. Per the Excise Tax Act, s. 222(1), GST/HST collected is deemed held in trust for the Crown until it is remitted. In New Brunswick the same $10,000 carries $1,500 of HST, and in Alberta $500 of GST.

Input tax credits: Per CRA, a GST/HST registrant recovers the GST/HST paid or payable on purchases and expenses related to commercial activities by claiming input tax credits (ITCs) on the GST/HST return. Input tax credits on eligible business expenses may reduce the amount remitted to CRA. Per CRA, one condition for claiming an ITC is having sufficient documentary evidence to substantiate it before the claim is made on a return. Source: CRA: Input tax credits.

Step 4: Marketing Cost Per Deal

What did it actually cost you to generate this deal?

If you spent $15,000 on marketing this year and closed 15 deals, your average marketing cost per deal is $1,000. That means $1,000 of every commission effectively went to acquiring the next client.

This number varies wildly by source:

Referral deals might cost you $0 in marketing (though you may pay a referral fee)
Online lead generation carries the cost of every lead you paid for, spread across the ones that closed
Sphere of influence deals may cost little beyond the time spent staying in touch

If you're not tracking marketing spend by lead source, you have no idea which channels are profitable and which are burning money. You might be spending $3,000 to generate deals that net you $4,000 — a 25% margin that one bad month can wipe out.

Step 5: Income Tax and CPP

This is the cost that does not show up on closing day.

No income tax is deducted from a commission before it is paid to a self-employed agent. Per CRA, tax instalments may apply when income does not have enough tax withheld, as with self-employment income. Per CRA, income tax is paid by instalments for a year when net tax owing is more than $3,000 ($1,800 for Quebec residents) in that year and in either of the two years before it. Per CRA, instalment payments for individuals are due March 15, June 15, September 15 and December 15. Sources: CRA: Required tax instalments for individuals, who has to pay and CRA: Required tax instalments for individuals, payment due dates.

The tax on one deal cannot be read off the deal. Income tax is worked out on net business income for the whole year, so the same $10,000 carries a different amount of tax in a year with a lower income than in a year with a higher one. Agent Runway's tax engine estimates federal income tax, provincial income tax and CPP contributions (QPP in Quebec) on net business income for the year. The estimate moves with province and with net business income for the year, so no single percentage of a commission fits every agent. The per-deal tax portion is that yearly estimate divided by the number of deals projected for the year. The free Canadian Realtor Tax Estimator runs the same engine on your own numbers.

This is an estimate based on CRA rules and engine calculations. Verify with your accountant or tax professional before making any filing or financial decision.

The Real Number

Let's add it all up for our $500,000 sale with a $12,500 gross commission:

Line Item	Amount
Gross commission	$12,500
Brokerage split (20%)	-$2,500
Transaction fee (1%)	-$125
Marketing cost (per deal avg)	-$1,000
Left before income tax and CPP	$8,875

That's 71% of your gross commission, and income tax and CPP still come out of it. The table stops there because the tax depends on your whole year, not on this deal.

And this doesn't include your monthly operating costs — desk fees, insurance, professional development, MLS fees, vehicle expenses, phone, technology subscriptions — which eat into that number further.

Why This Matters

This isn't meant to be discouraging. It's meant to be clarifying.

When you know the real cost of a deal, you make better decisions:

Pricing conversations become grounded in reality, not hope
Marketing budgets get allocated to channels that actually produce profitable deals
Goal setting starts from net income needs, not gross revenue targets
Pipeline management reflects what deals are actually worth to you, not their sticker price
Tax season holds fewer surprises when a tax estimate has been in view all year

The agents who build sustainable businesses aren't necessarily the ones closing the most deals. They're the ones who know exactly what each deal is worth — and build their business around that number.

Agent Runway calculates your real per-deal profitability automatically — factoring in your specific brokerage split, transaction fees, expense ratio, and provincial tax rates. No spreadsheet required.

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