Commission Split

A commission split is how a salon divides service revenue between the business and the person who did the work. A 50/50 split means a $100 haircut pays the stylist $50 and leaves $50 for the salon to cover rent, product, front desk, and profit. In practice most staff land in a familiar band: in one industry survey, the most common commission rate was 50% to 59%, and 93% of owners pay an additional retail commission on top of the service split.

Commission is the opposite trade from Booth Rental (Chair Rental): the salon takes on the risk and the overhead, so it also shares in every ticket and keeps control of the client, the brand, and the systems. The catch is that payroll is the heaviest line in the whole business. Staff compensation runs about 48% to 55% of salon sales, which is exactly why the split is the single biggest lever on Prime Cost and net margin. Set it too generously and there is nothing left after product and rent; set it too tight and good stylists leave.

Tips sit on top of, not inside, the split, and they matter more than owners assume: one in five stylists say tips are 20% of their annual income. Clean payments and retail tooling that calculates service commission, retail commission, and tips per stylist removes the payday arguments, and combining it with fair staff scheduling keeps your best earners on the floor.