For most owner-managed salons, a base wage plus tiered service commission (or a hybrid that adds retail incentives) is the safest starting point: the base keeps pay at or above the legal floor in quiet weeks, and commission still rewards productivity. Before you touch a percentage, check each person\u2019s employment status and confirm that current pay meets the statutory minimum wage or collectively agreed rate that applies in your country and sector. Everything else in your commission model is negotiable. That isn\u2019t.<\/p>\n
\nTL;DR:<\/strong><\/p>\n
\n
- A base wage plus tiered service and retail commission gives you a predictable payroll and a floor that protects pay in slow periods.<\/li>\n
- Set the threshold from your own wage cost and service margins, not from a competitor\u2019s percentages \u2013 the worked example below uses 3 times weekly wage cost.<\/li>\n
- Model labour cost against service margin, decide whether consumables and card fees come out of the commission base, and stress-test the plan against a quiet month.<\/li>\n
- Minimum wage levels, employment status and the tax treatment of commission are national matters; EU directives add a framework, including written information on how pay is calculated.<\/li>\n
- One earning trigger, written split rules for shared appointments and a statement for every pay period prevent most commission disputes.<\/li>\n<\/ul>\n<\/blockquote>\n
\nWhat are the main types of salon commission structure?<\/h2>\n
Every commission model does the same job differently: it links pay to output. The trick is picking the one that fits your margins, your team\u2019s experience and how predictable your appointments are.<\/p>\n
Straight or flat commission<\/strong> pays a fixed percentage of everything a stylist brings in, with no base wage attached. It\u2019s simple to run and rewards your busiest performers well, but it\u2019s brutal in quiet months, and where a statutory or collectively agreed minimum wage applies it can leave pay below that floor unless the plan guarantees a minimum. Few salons use it in pure form for employees.<\/p>\n
Base plus commission<\/strong> is the model most owners land on. Stylists get a guaranteed hourly, weekly or monthly wage, then earn commission once their takings cross a set threshold. This protects income during slow weeks and gives you a predictable floor for payroll forecasting. The threshold is the lever: set it too low and you\u2019re paying commission on mediocre performance; set it too high and nobody ever reaches it.<\/p>\n
Tiered commission<\/strong> raises the percentage as takings pass set levels. It rewards genuine top performers without inflating everyone\u2019s baseline pay, and it gives ambitious juniors a visible ladder to climb.<\/p>\n
Team-based splits<\/strong> pool commission across a section, with junior and senior stylists sharing a percentage of combined takings. This works well where mentoring matters more than individual competition, though it can demotivate your strongest earners if they feel they\u2019re subsidising weaker colleagues.<\/p>\n
Draw against commission<\/strong> advances a stylist a guaranteed sum, then deducts it from commission earned once they clear the target. It smooths income for the stylist but creates awkward conversations when someone falls short repeatedly.<\/p>\n
Retail commission<\/strong>, typically layered on top of service commission, rewards product sales. Set it on the margin left after product cost, not on the till price, so you never pay commission on money that goes straight back to your supplier.<\/p>\n
\n
- Straight commission: high reward, high risk, weak protection in quiet months.<\/li>\n
- Base plus commission: predictable, but threshold design is critical.<\/li>\n
- Tiered scales: motivate growth, add payroll complexity.<\/li>\n
- Team splits: build culture, risk resentment among top earners.<\/li>\n
- Draw against commission: smooths income, needs careful tracking.<\/li>\n<\/ul>\n
How do you set a commission threshold? A worked example in euros<\/h2>\n
Commission rates vary widely by country, role and the size of the base wage, so there is no single market rate worth copying. Build the threshold from your own wage cost instead. The figures below are illustrative \u2013 plug in your own rates.<\/p>\n
A senior colourist on \u20ac16 an hour, working a 35-hour week, has a weekly wage cost of \u20ac560 (before employer social contributions, which differ by country). With the threshold set at 3 times wage cost, commission starts at \u20ac1,680 of weekly takings, net of VAT. If she takes \u20ac2,080 in a busy week, that\u2019s \u20ac400 above the threshold; at 35% commission she earns an extra \u20ac140, so her pay for the week is \u20ac700, about 34% of her takings. In a quiet week with \u20ac1,500 of takings she stays on her \u20ac560 base.<\/p>\n
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- Calculate weekly wage cost (hourly rate \u00d7 contracted hours): \u20ac16 \u00d7 35 = \u20ac560.<\/li>\n
- Set the threshold at a multiple of that wage cost, so commission only kicks in once the salon has covered labour cost and a margin buffer. At 3 times it is \u20ac1,680; at 2.5 times it would be \u20ac1,400, and the same busy week would earn \u20ac238 (\u20ac680 \u00d7 35%).<\/li>\n
- Apply the agreed percentage to everything earned above the threshold: (\u20ac2,080 \u2212 \u20ac1,680) \u00d7 35% = \u20ac140.<\/li>\n
- Calculate on prices excluding VAT, since the VAT component is passed on to the tax authority and is not salon revenue.<\/li>\n<\/ol>\n
Tips are usually kept outside commission calculations, and their tax treatment differs between countries, so agree the approach with your accountant. Strip product cost out before you calculate margin on retail sales; otherwise you\u2019re paying commission on revenue you never actually kept.<\/p>\n
How do you design or revise a commission plan step by step?<\/h2>\n
Building a workable plan starts with numbers, not percentages plucked from a competitor\u2019s website.<\/p>\n
\n
- Set your business objectives first.<\/strong> Decide whether you\u2019re optimising for margin protection, team retention, retail growth or some blend of the three. A plan built to retain senior talent looks different from one built to push new-client conversion.<\/li>\n
- Model your labour cost against service profitability.<\/strong> Work out the direct margin on each service type \u2013 price minus consumables minus allocated time \u2013 because commission set on gross revenue distorts incentives when a quick blow-dry and a three-hour balayage carry very different margins.<\/li>\n
- Choose your model and define the mechanics precisely.<\/strong> Decide the earning trigger, the threshold, any exclusions (discounted services, free services for the team, complaint refunds), whether consumables and card fees are deducted before commission, and how adjustments apply.<\/li>\n
- Stress-test against a bad month.<\/strong> Run the numbers assuming 20% fewer appointments, two absences and a wave of refunds. In the example above, takings 20% lower (\u20ac2,080 \u00d7 0.8 = \u20ac1,664) fall just below the \u20ac1,680 threshold, so commission disappears entirely. Check that base pay alone still meets the legal minimum and that your team can live with it.<\/li>\n
- Document everything and set a review date.<\/strong> Six or twelve months, reviewed against actual payroll data, not gut feeling.<\/li>\n<\/ol>\n
Pro Tip:<\/strong> Run last year\u2019s actual appointment data through your proposed new model before you announce it. If the maths would have paid your best stylist less than she currently earns, you\u2019ve built a retention problem, not a pay structure.<\/em><\/p>\n
What are the legal essentials for commission pay in Europe?<\/h2>\n
Employment status is the first thing to get right, and the one owners most often assume rather than confirm. Whether someone is an employee, a worker or genuinely self-employed is decided by national law and practice: EU minimum-wage rules, for example, apply to workers with an employment contract or relationship as defined in each Member State, with consideration to the case law of the Court of Justice (Article 2 of Directive (EU) 2022\/2041). Typical questions are who controls the hours, who provides the tools and whether the person can send a substitute, but the tests and the cost of getting status wrong, such as back-dated tax and social security contributions, differ by country. Check with a local accountant or employment lawyer.<\/p>\n
Minimum wage is set nationally. Directive (EU) 2022\/2041 on adequate minimum wages establishes a framework, not an EU-wide minimum wage: the level remains a national decision, and countries where wages are set exclusively through collective agreements don\u2019t have to introduce a statutory minimum wage (Article 1(3) and 1(4)). Member States had to transpose it by 15 November 2024. In November 2025 the Court of Justice upheld the directive in most respects but annulled Article 5(2), which listed the elements national criteria for statutory minimum wages had to include, together with related wording in Article 5(1) and Article 5(3) (case C-19\/23). For payroll, the practical point is unchanged: check the statutory or collectively agreed minimum for your country and sector, and how commission counts towards it, before you set a low base.<\/p>\n
Holiday pay<\/a> is a common trap. Every worker in the EU is entitled to at least four weeks of paid annual leave (Article 7 of the Working Time Directive 2003\/88\/EC), and in case C-539\/12 (Lock) the Court of Justice ruled that a worker paid a basic salary plus sales commission cannot be paid basic salary alone for that leave. How commission is averaged into holiday pay is decided under national rules.<\/p>\n
Pay mechanics must be in writing. Under Directive (EU) 2019\/1152 on transparent and predictable working conditions, employers tell workers in writing about remuneration \u2013 the initial basic amount and any other components, indicated separately, plus the frequency and method of payment \u2013 no later than the seventh calendar day after the first working day (Articles 3, 4(2)(k) and 5(1)). Any change must be given in writing at the earliest opportunity and at the latest on the day it takes effect (Article 6(1)), so a new commission plan needs a written notice, not just a team meeting.<\/p>\n
Pay transparency adds another layer. The Pay Transparency Directive (EU) 2023\/970 requires employers to make the criteria used to determine pay, pay levels and pay progression easily accessible to workers, and those criteria must be objective and gender-neutral (Article 6(1)). Countries may exempt employers with fewer than 50 workers from the pay-progression part (Article 6(2)). Member States had to transpose it by 7 June 2026, so check how your country has implemented it. A written commission plan with clear tiers is a good basis for meeting it.<\/p>\n
Chair-rent arrangements, where a self-employed stylist rents space and keeps their own takings, sidestep commission altogether but bring their own tax, VAT and contract questions under national rules. Rent models suit salons with mostly experienced, self-sufficient professionals; commission models suit salons still building client bases and training juniors.<\/p>\n
Your written terms should explicitly state:<\/p>\n
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- The exact earning trigger (booked, completed or paid).<\/li>\n
- How refunds and clawbacks are handled.<\/li>\n
- Payment timing and frequency.<\/li>\n
- What counts towards commission and what\u2019s excluded, including consumables and card fees.<\/li>\n<\/ul>\n
Vague wording is where pay disputes start, so describe the formula itself, not just the intention behind it.<\/p>\n
How should you run commission payroll without disputes?<\/h2>\n
Pick one earning trigger and apply it consistently across every stylist and every service. \u201cCompleted and paid\u201d is usually safer than \u201cbooked\u201d, since booked appointments can be cancelled or altered, and calculating commission on an appointment that never happened creates instant disputes.<\/p>\n
Cancellations and no-shows shouldn\u2019t generate commission. Split appointments, where two stylists work on one client, need a pre-agreed split ratio written into the terms, not negotiated after the fact. Refunds should be reflected in the same pay period, ideally caught before payroll runs rather than corrected after wages have already landed in someone\u2019s account.<\/p>\n
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- Use one consistent earning trigger across the whole team.<\/li>\n
- Exclude no-shows and cancelled appointments from any commission calculation.<\/li>\n
- Agree split ratios for shared appointments in writing, in advance.<\/li>\n
- Reconcile refunds against the same pay period, not the next one.<\/li>\n
- Keep dated records of every commission statement issued.<\/li>\n<\/ul>\n
Pro Tip:<\/strong> Issue a written commission statement alongside every payslip, showing the calculation line by line. Stylists who can see exactly how their number was reached raise far fewer questions than those handed a lump figure with no working.<\/em><\/p>\n
Good record-keeping isn\u2019t just an audit safeguard. It\u2019s what you\u2019ll rely on if a former employee raises a claim over underpayment months after they\u2019ve left.<\/p>\n
How to set up commission payroll in Altegio<\/h2>\n
Manual spreadsheets are where most commission errors creep in: a threshold formula applied by hand across a busy team, week after week, eventually slips. Payroll in Altegio<\/a>, the booking and business management platform for appointment-based businesses \u2013 beauty, wellness, clinics, auto services, fitness and more \u2013 calculates pay from the appointments and sales already recorded in the system. Altegio also follows a Zero-Competition Policy: it isn’t a marketplace, so clients book through links that belong only to your business, they don’t see competitors while booking, and your client base is never resold. Here is how the plan above maps to its settings:<\/p>\n
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- Commission on services.<\/strong> In Payroll > Payroll Rules, set a percentage of the service price or a fixed amount per service, with separate values for a service category or individual services. Separate payouts for working alone, as the main professional with an assistant, or as an assistant cover shared appointments.<\/li>\n
- Commission on products.<\/strong> A percentage of the product price or a fixed amount, calculated on the amount actually paid at the cash desk, with separate values for product categories or individual products.<\/li>\n
- Base pay and a floor.<\/strong> Base pay per hour, day or month, plus a guaranteed minimum per day or month that the team member receives even if base pay plus commission comes out lower. Set it at or above the minimum that applies in your country.<\/li>\n
- Tiers.<\/strong> In Payroll > Payroll Criteria, define the conditions under which a rule applies: turnover, profit or number of services or products, counted for one team member or the whole Location, per day or per month, with or without discounts.<\/li>\n
- Consumables and discounts.<\/strong> A rule can calculate the payout as the price minus cost price, such as materials, and you choose whether the client discount or the cost price is applied first. You also decide whether discounts and payments with bonuses, memberships, gift certificates, the client account or promotions count towards the commission base. Consumables are written off automatically through bills of materials linked to services in inventory control<\/a>, and the Sales by Services report shows consumables cost, payroll and profit per service.<\/li>\n
- Card fees.<\/strong> Set the acquiring fee per payment method in Finance > Payment methods and fees, then choose in Payroll > General Settings who covers it. There are five options: split between the professional, assistants and the business; split between the professional and the business; split between the professional and assistants; the professional pays the full fee; or the business pays it all.<\/li>\n
- Per team member.<\/strong> The Payroll tab in each team member\u2019s card sets which payments apply to that person, from service-based earnings to product sales and shift-based pay.<\/li>\n
- Statements and payouts.<\/strong> Payroll > Settlements creates a payroll statement for a period and a team member, with bonuses and deductions, export to Excel and the payout recorded in Finance > Financial transactions. Only visits with the status Arrived are included, and items are highlighted if an appointment, a price or a visit status changed after accrual, so you can regenerate the statement before you pay.<\/li>\n<\/ul>\n
The step-by-step setup is in our guide to commission-based payroll rules, tiers and settlements<\/a>. To run your current commission rules on real data before you change a single percentage, start the 7-day free trial<\/a>. The price depends on the number of team members and the billing period \u2013 see pricing<\/a>.<\/p>\n
Balancing fairness, motivation and margin<\/h2>\n
The trade-off nobody talks about enough: high-commission, low-base structures feel generous in a good month and punishing in a bad one, and that volatility is what drives good stylists out the door, not the headline percentage. A higher base with a more modest commission tier often buys more loyalty than a flashier percentage.<\/p>\n
What builds trust isn\u2019t the number itself, it\u2019s predictability. A stylist who can forecast her own pay, and see exactly how it was calculated, trusts the salon more than one chasing a theoretically higher rate she can never quite verify. Test small changes, watch retention and margin for a full quarter, and adjust. Don\u2019t overhaul the whole structure on a hunch.<\/p>\n
FAQ<\/h2>\n
Do tips count towards commission?<\/h3>\n
Usually not. Tips are typically kept separate from commission and go to the person who earned them. Whether tips are taxed through payroll or count towards the minimum wage depends on national rules, so agree the approach with your accountant and write it into your pay policy.<\/p>\n
Does commission have to be included in holiday pay?<\/h3>\n
For the EU minimum of four weeks\u2019 paid leave, regular commission can\u2019t simply be left out: in case C-539\/12 the Court of Justice ruled that a worker paid a basic salary plus sales commission can\u2019t receive basic salary alone for annual leave. National rules set the calculation method.<\/p>\n
How profitable is owning a salon?<\/h3>\n
Profitability depends heavily on getting labour cost, commission thresholds, rent and retail margin right. Model them with your own figures, track profit per service and review the pay plan against real data rather than relying on guesswork.<\/p>\n
Read next<\/h2>\n
\n
- Pay system in a salon: fixed salary, commission, or a mixed model<\/a><\/li>\n
- Commission-based payroll \u2013 rules, tiers, daily calculation, settlements<\/a><\/li>\n
- Salon chart of accounts: a template for VAT, card fees and tips<\/a><\/li>\n
- How much do hairdressers, barbers, beauticians and nail stylists earn in Poland in 2026<\/a><\/li>\n<\/ul>\n
This article is general information, not legal, tax or HR advice. Rules differ between EU countries, so check your national law or ask a lawyer or accountant before acting.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"
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