How Does Residual Commission Work for Insurance Brokers?
By Brent Huling, independent agent · Last updated: October 20, 2026
Residual commission pays a broker every month for as long as a client stays on a program, instead of paying once at the sale. In the SIMERP partner program, the rate is $15 per enrolled employee, per month: a 100-employee client pays the broker $1,500 a month ($18,000 a year), a 500-employee client pays $7,500 a month ($90,000 a year), and the payments continue month after month on 12-month client contracts.
How is residual commission calculated?
By enrolled lives. Count the full-time employees enrolled in the program across a broker’s clients, multiply by $15, and that’s the monthly payment. Ten average clients — roughly 1,000 enrolled employees — comes to $15,000 a month, about $180,000 a year. There’s no tier table and no production bonus math: every enrolled life pays the same $15, which makes the income easy to forecast from a book of business. The partner revenue calculator runs the calculation from a broker’s actual client count and average client size.
How is residual commission different from one-time commission?
A one-time commission pays for a transaction; a residual pays for a relationship. With one-time products, next month’s income starts at zero and depends on the next sale. With residual commission, this month’s enrolled clients are still paying next month — and every new client stacks on top. That’s why residual lines are valued the way they are in a broker’s book: they turn years of relationship-building into an income stream that doesn’t have to be re-sold.
Does earning residual commission here affect my existing book?
No — it’s built not to. SIMERP layers on top of the health plan the broker already placed. The plan doesn’t change, the carrier doesn’t change, and the broker of record doesn’t change. The program is funded by the payroll tax savings it creates for the employer — roughly $640 per eligible employee per year — so it runs at zero net cost to the client and never competes with the broker’s placements. If anything, it defends the book: the broker who brings a client a five- or six-figure payroll saving at renewal is harder to displace. The broker-specific walkthrough is on the SIMERP partner program page for insurance brokers.
What does a broker have to do to earn it?
Make the introduction. The back end handles the client presentation, the Section 125 documentation and paperwork, employee enrollment, ongoing administration, and client support, and commissions are tracked in a back office the broker can check at any time. Commissions start once a client is enrolled and the program is live. The structure behind the program is explained in what a Section 125 partner program is, and the earnings picture across partner types is in how much employee benefits partners earn.
Frequently asked questions
Who pays the residual commission?
The program pays the broker directly, every month, for as long as the client stays on the program. The client pays nothing — the program is funded by the payroll tax savings it creates.
What happens if a client leaves the program?
The residual for that client ends. The residual from every other enrolled client continues, which is the point of building a book of clients instead of relying on a single account.
Does residual commission replace my health-plan commissions?
No. SIMERP layers on top of the client’s existing health plan — your placements and the commissions attached to them are untouched. The residual is a separate, additional revenue line.
What size client qualifies a broker for residual commission?
Employers with 10+ full-time W-2 employees (30+ hours per week). Employees on a spouse’s plan still count toward eligibility.
See what your book would pay
Enter your client count and average client size — the calculator shows your monthly and annual residual at the $15 rate.
Run the Partner Revenue Calculator