Booth rental vs. commission vs. hourly: how salons pay their team
How you pay your stylists, therapists or techs shapes your schedule, your taxes and how much control you have. Here’s how the three common models work.
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The three models
| Model | How it works | Who sets the schedule and prices |
|---|---|---|
| Booth or chair rental | The pro pays you a weekly or monthly rent and keeps what they earn. They run their own book and usually buy their own product. | Usually the renter, since they run their own business |
| Commission | The pro is usually on your payroll and earns a percentage of the services they perform, sometimes with a base pay guarantee. | Usually the salon |
| Hourly (plus tips or bonuses) | The pro earns an hourly wage, sometimes with product or service bonuses. | The salon |
The tax and legal side
Whether someone is an employee or an independent contractor depends on how the relationship actually works, not just what you call it. The IRS looks at behavioral control, financial control and the relationship of the parties. Read the IRS’s own guide, Independent contractor (self-employed) or employee?, and your state may apply its own test. Many state cosmetology boards also have their own rules for booth renters, so check with yours. This is general information, not legal or tax advice; talk to an accountant or employment attorney before you decide.
How to choose
- Booth rental gives predictable rent and less admin, but less say over the client experience.
- Commission ties pay to output and keeps the brand consistent, but you carry payroll and the slow weeks.
- Hourly is simplest for new pros building a book, but costs you on slow days.
Some salons mix models as people grow. Whatever you pick, put it in writing.
Run your business on free software
TotalPro360 handles booking per provider, prices by provider level, tips to a named provider, commissions, checkout and accounting for $0 a month with unlimited staff. Staff can log hours and you approve them. Payroll is coming December 2026 as a paid add-on: $39/month + $6 per employee.
“I’ve got a person for you.” Get paid for it.
Your clients ask you for recommendations all the time. On the TotalPro360 network, when your stylist sends a client to a massage therapist on the network and that appointment is booked and paid, your business earns a share of the network fee. The business that receives the referral pays nothing for the lead itself, only a network fee after the job is booked and paid. How the referral network works · Our sister network for home services.
Questions people ask
Do booth renters need their own license?
In most states every person doing cosmetology services needs their own license, and some states have separate rules for the salon and for renters. Check your state cosmetology board.
Can I switch from commission to booth rental?
Yes, but it changes the relationship, not just the pay, so plan it with your accountant and put the new terms in writing.
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