How do you set up a staff commission system in a salon?

With three decisions: what the commission is tied to, who the revenue is credited to, and which date the period closes on. If those three are not in writing, the calculation is argued over every month. Discuss the rate last; without a measure, a rate means nothing.

Is the commission tied to the amount sold or the amount collected?

Either works, but you pick one. Tied to the amount sold, the commission falls in the period the work was done, but you may pay on money that has not reached the till. Tied to the amount collected, it shifts to the period the money arrived and an open balance is not counted until it clears. The problem is mixing the two in the same period.

When two staff see the same client, who gets the revenue?

This is not a question of arithmetic but a decision made in advance. However the share will be split, it is written before the period starts: to one person, to whoever finished the work, or between the two at a rate set up front. Without a rule the same treatment is argued over every month and the record convinces nobody.

What commission rate should I set?

We do not write a rate on this page. The rate depends on the salon's cost structure, its pay arrangements and your contracts; a figure buried here would be wrong for your salon. Set the measure and the period the way this page describes, and settle the rate with your accountant.

What is the difference between keeping the commission in a notebook and reading it from the record?

A figure kept in a notebook is totalled at month end and only the person keeping it knows that total. If the person doing the work goes on the record with every treatment, the per-person total can be read during the period too; the team knows where it stands and objections are settled from the record. What changes is not the figure but where the figure comes from.

The commission argument ends at the start of the period, not the end.

If what the commission is tied to, who the revenue is credited to and when the period closes are settled in advance, all that is left at month end is reading the figure.

The team watches whatever the commission is tied to

A commission is not a payment line, it is a direction. Whatever you count, the team produces more of: count service revenue and they move towards expensive treatments, count product sales and they talk about the shelf, count occupied chair hours and they work on the empty gaps.

So the first decision is not the rate, it is the measure. Whatever gap you want closed in the salon is what the commission is built on; change the measure and the team's day changes with it.

Service revenue: how much work goes through whose chair
Product sales: whose hand the product on the shelf leaves by
Occupied chair hours: the gaps left empty in the appointment book
Returning clients: the same person booking a second time

Who the revenue is credited to, settle that first

A commission calculation starts by splitting the revenue, and what gets split is not an amount but the work. If two people saw the same client, if the person who sold the package is not the one who gave the treatment, or if the front desk sold the product, the owner of that revenue is not obvious.

Each of those situations needs a rule, and the rule is written before the period starts. A share discussed afterwards is not a calculation, it is a negotiation.

The person doing the work goes on the record with every treatment
If two people saw the client, the split is written in advance
The person who sold the package is kept apart from the one who gave the treatment
It is clear who a product sold at the front desk is credited to

The amount sold or the amount collected

In a salon the sale and the payment may not fall on the same day. A package is paid for in parts, a client's account can stay open, and money taken by card reaches the account on another day.

Tie the commission to the amount sold and you pay on money that has not reached the till. Tie it to the amount collected and the commission falls in the month the money arrived, not the month the work was done. Both have their logic; what does not work is mixing the two in the same period.

One measure only: either the sale date or the payment date
If a package is paid in parts, which part counts is written down
Whether a refunded treatment comes off the commission is settled up front
It is agreed which period an open balance falls into when it is cleared

Product sales are totalled apart from services

A product sold from the shelf and a service given in the chair are not the same line. A service spends time and a chair; a product has a purchase price already paid. Merged into one total, what each brings in becomes invisible.

Totalled separately, two things surface at once: whether the product is genuinely selling, and whether the service revenue is being inflated by products. The commission can then be built on the two headings separately.

Service revenue and product sales are totalled separately
Which heading a product inside a package goes under is written down
A product consumed during a treatment is not counted as a sale
If product sales enter the commission, which products do is listed

No figures are discussed before the period closes

A commission is the account of a period, and that period's start, end and moment of closing have to be clear. The close is the moment data entry stops: a payment written late or a line corrected afterwards changes the period's total.

A correction that arrives after the close is not deleted, it is written into the next period. That way a commission already paid is not reopened for argument.

The start and end of the period are written as dates
Data entry finishes before the close
A correction after the close moves to the next period
Commission is discussed once the figure is frozen

Let the team see their own figure during the period

Announcing the commission once at month end means the team only learns how they did after the work is over. At that point the figure neither rises nor falls; it is only argued about.

If the per-person total can be read during the period, everybody knows where they stand and month end stops being a surprise. Objections are settled by looking at the record rather than at memory.

The rule is shared in writing before the period starts
Everyone can see their own per-person total during the period
Objections are settled by looking at the record
If the rule changes, it applies from the next period

Frequently asked

How do you set up a staff commission system in a salon?: With three decisions: what the commission is tied to, who the revenue is credited to, and which date the period closes on. If those three are not in writing, the calculation is argued over every month. Discuss the rate last; without a measure, a rate means nothing.
Is the commission tied to the amount sold or the amount collected?: Either works, but you pick one. Tied to the amount sold, the commission falls in the period the work was done, but you may pay on money that has not reached the till. Tied to the amount collected, it shifts to the period the money arrived and an open balance is not counted until it clears. The problem is mixing the two in the same period.
When two staff see the same client, who gets the revenue?: This is not a question of arithmetic but a decision made in advance. However the share will be split, it is written before the period starts: to one person, to whoever finished the work, or between the two at a rate set up front. Without a rule the same treatment is argued over every month and the record convinces nobody.
Is commission on product sales calculated separately from services?: Totalling them separately works in your favour. A service spends time and a chair; a product has a purchase price already paid. Merged into one total, what each brings in becomes invisible. Do not count a product consumed during a treatment as a sale; that belongs on the cost side.
What commission rate should I set?: We do not write a rate on this page. The rate depends on the salon's cost structure, its pay arrangements and your contracts; a figure buried here would be wrong for your salon. Set the measure and the period the way this page describes, and settle the rate with your accountant.
What is the difference between keeping the commission in a notebook and reading it from the record?: A figure kept in a notebook is totalled at month end and only the person keeping it knows that total. If the person doing the work goes on the record with every treatment, the per-person total can be read during the period too; the team knows where it stands and objections are settled from the record. What changes is not the figure but where the figure comes from.

This guide describes the salon's own way of keeping accounts and is not employment law or accountancy advice. How a commission feeds into wages, payroll and contracts depends on the legislation; consult your accountant and your lawyer about your own situation.

So you are not hunting for who brought in what at period end

In Bi'Salon the Staff tab of the Revenue / Treatment Report splits the period by person; the Average total, Average count and Top performer cards sit above the list. You use the date range, branch, staff and department filters together, and download the filtered statement as Excel or PDF.

See the per-person breakdown