The CAP is the most misunderstood concept in real estate compensation. Brokerages sell it as a path to 100% commission. The math tells a different story — and most agents never see it until after they have already paid.
Ron L. Miranda
Designated Broker & Founder, Texas Broker Sponsor™ · Licensed Broker Since 2012 · 16+ Years
A commission CAP is the maximum annual dollar amount an agent pays to their broker under a percentage split model. Once the agent's cumulative split payments reach the CAP threshold, they retain 100% of commissions for the remainder of the year — until the anniversary date resets the clock.
The CAP model was popularized by Keller Williams and has since been adopted by eXp Realty, Real Broker, and Realty of America. The marketing pitch is straightforward: pay a split until you hit the CAP, then keep everything. It sounds like a reward for high production.
The problem is the math behind the threshold — and the reality of how many agents actually reach it.
Using Keller Williams as the primary example — the originator of the CAP model and still the most widely used version in Texas:
The Split
KW agents start on a 70/30 split. For every $10,000 in commission, the agent keeps $7,000 and the Market Center keeps $3,000. Additionally, KW charges a 6% royalty fee on every commission, which goes to KW corporate — separate from the Market Center split.
The CAP Threshold
The Market Center CAP is approximately $21,000 per year (varies by location). To pay $21,000 in 30% splits, the agent must earn $70,000 in GCI from the split portion alone. But the 6% royalty is separate — adding another $4,200 on $70,000 GCI. Total annual broker cost before hitting the CAP: approximately $25,200.
The GCI Required
To actually hit the KW CAP, an agent needs to close enough transactions to generate $700,000+ in gross commission income. At the Texas median commission of $9,000 per transaction, that is approximately 78 transactions in a single year — a production level achieved by fewer than 1% of individual agents.
The Anniversary Reset
The CAP resets on your anniversary date — the date you joined the brokerage. If you join in July, your first CAP year runs July to July. Even if you hit the CAP in month 10, you start paying splits again in month 12. Agents who join mid-year often pay two partial CAPs in 18 months.
Post-CAP Fees
Hitting the CAP does not mean zero cost. Most CAP brokerages charge a per-transaction fee after the CAP is hit. eXp charges $250 per deal (max $5,000). Real Broker charges $285 per deal. These post-CAP fees add $2,500–$5,000 for agents who do hit the threshold.
All data sourced from official brokerage documentation and income disclosures. Fee structures vary by Market Center and individual agreement — verify directly with each brokerage before signing.
| Brokerage | Split | Annual CAP | GCI to Hit CAP | Monthly Fees | Post-CAP Fee | CAP Reset |
|---|---|---|---|---|---|---|
| Keller Williams | 70/30 + 6% royalty | $21,000 | ~$700,000 | $50–$150/mo | $0 (100%) | Anniversary date |
| eXp Realty | 80/20 | $16,000 | ~$80,000 | $85/mo (tech) | $250/deal (max $5K) | Anniversary date |
| Real Broker | 85/15 | $12,000 | ~$80,000 | $0 | $285/deal | Anniversary date |
| Realty of America | 85/15 (after 3 deals at 60/40) | $14,000 | ~$93,000 | $62.50/mo | $250/deal | Anniversary date |
Sources: KW official documentation; eXp Realty income disclosure (2024); Real Broker support.therealbrokerage.com (Jan 2026); Realty of America FAQ (2025). Fees vary by Market Center and individual agreement.
The CAP is marketed as a reward for high production. But the production levels required to reach the CAP are far above what the median Texas agent achieves.
71%
of active agents closed zero transactions in 2023
Source: Redfin / Inman, Jan 2025
< 2%
of KW agents ever earned $100K+ in lifetime profit share
Source: KW Press Release, July 2024
29%
of eXp agents earned $0 in revenue share in 2023
Source: eXp U.S. Income Disclosure, 2024
For the median Texas agent closing 10–12 transactions per year at an average commission of $9,000, the annual GCI is approximately $90,000–$108,000. At KW's 70/30 split with a 6% royalty, that agent pays:
| Fee Component | On $90K GCI | On $108K GCI |
|---|---|---|
| 30% split to Market Center | $27,000 | $32,400 |
| 6% KW royalty fee | $5,400 | $6,480 |
| Monthly desk fee (est. $100/mo) | $1,200 | $1,200 |
| Technology fee (est. $45/mo) | $540 | $540 |
| Total Annual Cost to Broker | $34,140 | $40,620 |
The median KW agent never hits the $21,000 CAP — they pay $27,000–$32,400 in splits alone, plus royalty and fees, for a total annual broker cost of $34,000–$40,000. The CAP is not a ceiling they reach — it is a number that exists above their production level.
The CAP Illusion
The CAP is not a benefit for the median agent. It is a marketing tool designed to attract high-producing agents who might otherwise leave for a flat-fee model. For the 99% of agents who never reach the CAP threshold, it is simply a split model with a ceiling they never see.
For an agent closing 10 transactions per year at $9,000 average commission ($90,000 GCI):
KW CAP Model
TBS Flat Transaction Fee
Request the TBS pricing sheet to see the exact flat fee and calculate your personal annual savings at your current production level.
A commission CAP is the maximum annual amount an agent pays to their broker under a split model. Once the agent's total split payments reach the CAP amount, they keep 100% of commissions for the remainder of the year. For example, Keller Williams has a CAP of approximately $21,000 per year. After paying $21,000 in splits, the agent earns at 100% until the anniversary date resets the CAP.
Keller Williams' Market Center CAP is approximately $21,000 per year, though it varies by Market Center. On a 70/30 split with a 6% royalty fee, an agent needs to earn roughly $700,000 in gross commission income (GCI) before hitting the CAP. According to KW's own data, less than 2% of agents ever earned $100,000 or more in lifetime profit share, suggesting most agents do not produce at levels that make the CAP financially advantageous.
eXp Realty's CAP is $16,000 per year on an 80/20 split. After paying $16,000 in splits, agents pay a $250 transaction fee per deal for the rest of the year (capped at $5,000 in post-CAP fees). To hit the eXp CAP, an agent needs approximately $80,000 in GCI — about 8–9 average Texas transactions.
No. According to Redfin's 2024 analysis, 71% of active real estate agents closed zero transactions in 2023. NAR data shows the median agent closes 10–12 transactions per year. At KW's 70/30 split with a $21,000 CAP, a median-producing agent earning $90,000 GCI would pay approximately $27,000 in splits and royalties — never reaching the CAP threshold of $700,000 GCI.
For most Texas agents, a flat transaction fee is mathematically superior to a CAP model. A flat fee costs the same per transaction regardless of commission size, has no minimum production threshold, and does not reset annually. An agent closing 10 transactions at $9,000 average commission pays approximately $27,000 in splits at KW vs. a flat fee that is dramatically lower — with no monthly fees, no royalty, and no CAP to chase.
At most CAP-based brokerages, the CAP resets on your anniversary date — the date you joined the brokerage. This means even if you hit your CAP in month 10, you start paying splits again in month 12. Agents who join mid-year often pay a full CAP in their first partial year, then a full CAP again in their first full year — effectively paying two CAPs in 18 months.
See the Real Numbers
See exactly what you would pay under the TBS flat-fee model versus your current CAP-based brokerage. Ron reviews every application personally.
About the Author
Ron L. Miranda
Designated Broker & Founder, Texas Broker Sponsor™ · Licensed Broker Since 2012 · 16+ Years in Texas Real Estate
Ron is the founder of Texas Broker Sponsor™, the original flat-fee broker sponsorship company in Texas. Since 2012, he has helped thousands of licensed real estate agents maintain their TREC license without the overhead of traditional split-based brokerages. Every article on this site is written or directly reviewed by Ron.