How to calculate staff commission
Commission is the number in a salon that everyone checks twice. Get it wrong and you lose money and trust at once. This guide covers what commission is calculated on, service and retail rates, product cost, thresholds, tips, card fees and advances, with worked examples.
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Write the rule down first
Most disputes come not from bad maths but from a rule nobody spelled out. A stylist hears "a share of what I take" and assumes the full amount the client paid; the owner means the figure after VAT. So put every part of the rule on one page before anyone starts: the amount commission is worked out on, which services earn which rate, whether retail earns anything, who keeps tips, who absorbs card fees, how advances come back and how often you settle up.
If the rule changes, write down the date the new version starts. Changing a rate backwards means reopening weeks you have already paid.
The commission base: a share of what, exactly?
The amount commission is calculated on is the base, and there are three common choices. Gross, including VAT, is what the client handed over: easy to explain, but a VAT-registered salon then pays commission on tax that was never its money. Net, excluding VAT, is what the salon really keeps, and many owners see it as the fairest base. Net minus product cost deducts the colour, developer or treatment used before working out the share, so the salon isn't paying commission on its own stock.
Set the rate to match the base, and check the VAT side with your accountant before you choose.
Service commission vs retail commission
A cut, a skin fade or a blow-dry is almost entirely the stylist's skill and time. Colour, perms and keratin also use up expensive product. That is why many salons set rates by service category, say a higher rate on cuts and a lower one on colour. Keep the categories few; a rate for every single service becomes a spreadsheet nobody can check.
Retail is separate. Shampoo, wax, beard oil and aftercare sell better when the person recommending them gets something for it. Set a retail rate of its own and credit it to the stylist named on that product line of the ticket.
Tiered and threshold commission
Some salons raise the rate as takings grow: one rate up to a target, a higher one above it. Tiers reward busy stylists, but every extra step makes the sum harder to follow. A simpler variant is a fixed wage plus a bonus on service takings above a threshold, which gives a newer stylist a steady base. A wage brings employer duties such as minimum wage and holiday pay, so check the details with your accountant.
Tips, card fees and advances
Tips are not takings. Keep them out of turnover and out of the commission base, and record them on their own. Agree whether each stylist keeps their own tips or shares some with juniors and assistants; how tips are taxed is a question for your accountant.
On card payments the provider takes a fee. The salon can absorb it, deduct it from the stylist's commission or split it; just put the choice in writing.
An advance is paid during the period and taken back at settlement. Record every advance as cash out of the till; one handed over and never written down is the item most often forgotten on pay day.
Discounts, cancellations and corrections
When a client gets a discount, does the stylist earn on the list price or on what was paid? The fairest and simplest rule is commission on the amount actually charged. Limit who can give discounts and ask for a reason each time, so a stylist who earns less can see why.
If a ticket is cancelled or reopened, the commission has to follow. Rather than deleting, work with reversals: the original entry stays and a matching correction is written against it, so any mismatch later is easy to trace.
Daily, weekly or monthly?
Many salons pay weekly or monthly and only look at commission on pay day, so weeks of small mistakes surface at once. Checking daily keeps the numbers small: the stylist sees today's commission tonight and raises a question while it is fresh. You can still pay weekly; what matters is checking in small pieces.
Define the rule
Base, service rates, retail rate, tips and card fees, plus the date the rule starts.
Link every line to a stylist
Every service and product line goes to the person who did the work; a line with no stylist breaks the sum.
Close the day or the period
Approve the figures at the end of the day or pay period and deduct any advances.
Show the stylist
Each stylist sees their own lines and total, then confirms or disputes with a reason.
Staff commission in Makastam
In the Makastam staff commission module you give each stylist a rule: commission, fixed wage + bonus, or chair rent. The base, rates per service category, a retail rate, the stylist's share of tips and who carries the card fee are all part of the rule. Rules are versioned: a new rate applies from the date you choose, never backwards to approved periods. Multi-step tiers aren't built in; the threshold bonus on fixed wage + bonus is the closest option.
As tickets close, each line's commission is written to the stylist's ledger; cancellations are corrected with a reversal and advances come off the earnings. Pay periods are daily, weekly or monthly, and the "Now" tab shows what you owe each person right now. Stylists see only their own figures under "My earnings" and confirm or dispute with a note. See staff roles and logins.
Take commission off the calculator
Set the rule once and let every closed ticket work out the commission.
Frequently asked questions
Should commission be worked out before or after VAT?
It is whatever the salon and stylist agree. Many owners prefer the amount excluding VAT, because VAT isn't the salon's income. Put it in writing and check the VAT side with your accountant.
How do I keep commission fair on colour and other product-heavy services?
Either give those categories a lower rate, or deduct the product cost before working out the share. Both stop the salon paying commission on its own stock.
Do tips count towards commission?
No. Tips aren't takings and should be recorded separately. Whether each stylist keeps their own or the team shares them is a separate agreement.
What if a stylist disputes the figures?
Don't delete anything. Let the stylist write down the objection; if they are right, enter a correction with a reason in the next period.
Related pages
- FeaturesStaff commission: set the rule once, it adds up dailyCommission, wage plus bonus or chair rent. Earnings are logged as each ticket closes, with daily periods, a live view and staff sign-off, so pay day is calm.
- GuidesChair rental vs commissionChair rental or commission for your stylists? How each model works, pros and cons, a break-even example, hybrid rent and the employment status question.
- GuidesHiring your first stylist: what to get rightHiring your first stylist or barber: trial day, right to work checks, juniors and apprentices, pay model, written agreement and a clean first-day set-up.
- FeaturesStaff roles and logins: everyone sees their own workOwner, manager, reception, stylist and accountant each log in with their own access. Stylists see only their own diary and earnings; every discount is logged.