Many salons have a commission-building system in place to encourage stylists to bring in business and compensate them for their work. While commission is common among salons, the type, amount and structure of the commission varies significantly from salon to salon. Some salons establish set rates for every stylist, while others increase rates for stylists with seniority or stylists who exceed certain monetary amounts.
Salon commission rates range from 35 to 60 percent, according to Forbes.com. The exact percentage of commission that a stylist earns can vary based on seniority, with junior stylists typically earning the lower end of the commission scale. Some salons use a graduated commission scale in which stylists who meet certain monetary goals receive an increased commission rate for the additional business they bring in above that amount. For example, stylists may earn a certain commission percentage for the first $1,000 she brings in per week, then 5 percent more for each additional $1,000, according to Forbes.com. In 2012, hairdressers, hairstylists and cosmetologists earned an average of $12.88 per hour, including commission, according to the Bureau of Labor Statistics. This comes to about $26,790 per year.
Some salons pay stylists on a commission-only basis, meaning they receive no salary or hourly pay. However, this structure can be difficult for newer stylists who may not
have a large customer base. Some salons offer a salary or hourly wages for the first few months before switching to commission-only pay. Other salons implement a hybrid salary-commission system in which employees receive a minimum salary or hourly pay, along with commission. Stylists working within a hybrid system often receive lower commission rates than those working in commission-only salons.
Salons often give stylists commission for both styling services and hair-care product sales. Stylists are expected not only to attract clients for shampoos, cuts, colorings and stylings, but also to promote certain products and encourage their clients to purchase them from the salon. Some salons have different commission rates for salon services and product sales. As with styling services, commission from product sales may work on a set rate or a graduated scale.
Rather than hiring employees, some salons simply rent out chairs in their salon to independent stylists for a flat monthly fee. In this model, the salon owner is effectively just a landlord, collecting monthly rent from each stylist. Booth-rental stylists do not receive a commission, but they are typically able to pocket 100 percent of the earnings from their services. This model provides very little incentive for stylists to sell the salon's products, as they are typically unable to earn commission from the sales.