How to Pay Stylists on Commission

The commission structure means stylists get a portion of the fees charged to clients.

Your stylists are the heart of the salon, serving as the direct line to your clients. Keeping those clients coming through the door is essential to the salon's success. The method you use to pay your stylists affects their satisfaction and security. A commission method leaves your stylists open to wide variations in their paychecks. Stylists new to the industry who don't already have several clients may suffer from this pay method. The way you set up your commission payments affects the stylists' motivation to keep customers coming to your salon.

Instructions

1. Decide whether you will pay only commission or whether you will offer a small base salary with commission on top of the salary. If you have difficulty attracting stylists with straight commission, consider offering a salary plus commission for the first six months the stylist works at your salon so she has time to build up her clientele.

2. Determine whether you will pay stylists one set percentage no matter how much business she does or whether you will establish a graduated commission option. The graduated scale gives stylists a larger commission percentage for reaching a certain dollar amount in sales for the week. For example, you might increase the commission on any amount above $1,200 for the week by 5 percent. If your normal commission is 35 percent, you would pay your stylists 35 percent for the first $1,200 in revenue for the week and 40 percent commission on the amount that exceeds $1,200.

3. Calculate the percentage you want to use for the commission, which typically ranges between 35 percent and 60 percent, according to "Forbes." Review how much you usually make and your total expenses to help you figure the percentage. Ensure the percentage you offer leaves you enough to cover your bills and make a profit based on your average numbers.

4. Set the commission rate for hair care products sold by the stylists if you will pay it at a different rate from the salon services. Figure out your cost for the products so you are able to offer your stylists a commission that allows you to cover the costs and make a profit yourself.

5. Establish a system for tracking the sales for each individual stylist so you are able to accurately track the money and pay the employees. A software program that handles sales and allows you to track the transactions for different employees is the easiest method.

6. Write your payment plan into a formal policy. Define exactly how much the stylists will receive and how the system works so all new stylists are clear on the payment system.

Tips & Warnings

• When setting your commission scale, check how other commission-based salons in the area pay their stylists. If your percentage is low compared to the others, you are less likely to attract the most qualified stylists.

References

• "Forbes"; How to Run a Beauty Salon: Costs; Maureen Farrell; April 2007
• Business Route: Beauty Salons -- A Buying Guide