Not legal or tax advice. Rules differ by state and change over time. Ask an employment attorney, accountant or your state board before relying on this.
Salon pay is unusual: service commission, retail commission, tips, product charges and sometimes an hourly guarantee. Software that calculates pay from the actual tickets saves hours and avoids errors.
Payroll Add-On Prices
- Vagaro Payroll: $34 a month + $5 per employee.
- Square Payroll: from $35 a month + $6 per person paid.
- GlossGenius Payroll: $40 a month + $6 per seat.
- Mangomint Payroll: $50 a month + $8 per worker, with tax filing for each location.
Commission tracking is also listed by DaySmart Salon, GlossGenius Platinum and SQUIRE Executive.
What Commission Tools Should Handle
- Different rates for services and retail.
- Tiers that rise with sales.
- Product or back-bar deductions, if your pay plan uses them.
- Tips passed through in full.
The Federal Floors
Under the Fair Labor Standards Act, a retail or service establishment can be exempt from overtime for an employee only when that employee's regular rate is more than one and a half times the minimum wage and more than half of their pay over a representative period of at least a month is commission (29 U.S.C. § 207(i)). Otherwise normal overtime applies. Tips belong to the employee; if you take a tip credit, the rules in 29 U.S.C. § 203(m) apply. Your software should let you check each workweek against these floors.
Before You Switch Payroll
Run one pay period in parallel with your current method and compare every paycheck. Ask whether the add-on files state taxes for your state.
Common Questions
Can I Pay Stylists Commission Only?
Federal law still requires at least minimum wage for all hours worked, and overtime unless an exemption applies. Commission-only pay must be checked against those floors each workweek. State law can be stricter.
Do Booth Renters Go on Payroll?
No, a genuine booth renter is not your employee. Whether someone is truly independent depends on the facts; see our booth rental guide and the IRS guidance it links.
Sources
- Fair Labor Standards Act, 29 U.S.C. § 207 (Cornell LII)
- Fair Labor Standards Act, 29 U.S.C. § 203 (Cornell LII)
- Our software data, with each vendor source and the date read
- How we get our data
Basis: Vendor pricing pages; Fair Labor Standards Act (29 U.S.C. §§ 203, 207).