Payments
Commission or booth rent: how to pay your team
A shop pays its team one of four ways: a share of each service, booth rent with the takings kept, an hourly wage, or a mix. Each one decides who carries a slow week and who keeps a busy one. Here is how they work, a calculator for the commission and rent trade, and a table to compare them.
The short answer
Choose commission when the shop supplies the clients, the chair, the products and the schedule. Choose booth rent when the person runs their own business under your roof and sets their own prices. Choose hourly for roles that do not run a chair of their own, such as a front desk or a trainee. A mix is common: an hourly floor with commission on top.
The model also settles who carries risk. On commission, a quiet week costs both of you. On booth rent, the renter pays the same rent whether the week is quiet or full, so the owner’s income is steady and the renter’s upside is larger. On hourly pay the shop carries the quiet week alone.
One caution before you pick. Whether someone counts as an employee or an independent renter depends on how the work is actually done, not on what you call the pay model. The IRS and your state labor department publish the tests. Settle that question first, then choose the model that fits.
Commission: a share of what the chair earns
On commission, the person is paid a share of the services they complete. The shop sets the prices, books the clients and keeps the rest to cover rent, supplies and the front desk. It is the easiest model to start with because the person risks nothing on day one.
The details are where shops differ. A flat percentage is simplest. Tiers raise the rate after a revenue threshold, for example a higher share once a person passes a set amount in a pay period. A flat amount per service done suits a fixed-price service such as a kid’s cut. A single service can also have its own rate for one person, such as a colorist’s color work.
Two rules keep it fair. Tips are separate from the commission base, so a generous customer never changes the rate. And a refund comes off first: a bill refunded in full earns no commission, and a part refund earns on what was kept.
Booth rent: the renter keeps the takings
A booth or suite renter pays the shop a fixed amount, weekly, every two weeks or monthly, and keeps what their clients pay. They usually set their own prices, buy their own supplies and keep their own hours. The owner’s side is a predictable rent line that does not move with the renter’s sales.
The break-even is simple. If a renter keeps 60% on commission and would pay $300 a week in rent, rent pays them more once weekly sales pass $750, because $300 divided by the 40% the shop would have kept is $750. Below that, commission pays more. Move the sliders below to test your own numbers.
Commission or booth rent: which pays a team member more?
Set a weekly sales level, a commission split and a weekly rent. The chart shows where the two cross.
- Takes home on commission
- $1,500
- Takes home on booth rent
- $2,200
- Booth rent pays more above
- $750 weekly sales
- Commission
- Booth rent
Hover or tab to a column for the numbers.
| Commission | Booth rent | |
|---|---|---|
| $500 | $300 | $200 |
| $1,000 | $600 | $700 |
| $1,500 | $900 | $1,200 |
| $2,000 | $1,200 | $1,700 |
| $2,500 | $1,500 | $2,200 |
| $3,000 | $1,800 | $2,700 |
| $3,500 | $2,100 | $3,200 |
| $4,000 | $2,400 | $3,700 |
| $4,500 | $2,700 | $4,200 |
| $5,000 | $3,000 | $4,700 |
| $5,500 | $3,300 | $5,200 |
| $6,000 | $3,600 | $5,700 |
Example arithmetic before tax and supplies. Booth rent wins once sales pass rent ÷ (1 − commission share).
Ignores tips, product sales and card fees. Your accountant or the IRS rules decide employee versus renter status, not the pay model.
Hourly pay and the hybrids
Hourly pay fits roles where the person does not control sales: a front desk, a shampoo assistant, an apprentice in their first months. The shop pays for hours whether the chair is busy or not, so the cost is predictable and the person has no upside from a busy day.
A hybrid keeps a floor and adds an incentive. The usual shapes are an hourly wage plus a commission above a threshold, or commission with a guaranteed minimum. They protect a new hire through a slow start and still reward a full book.
Whatever you pick, you need two records: the hours worked and the sales behind them. Hours decide the wage. Sales decide the commission. Keeping both in one place saves a spreadsheet every pay period.
Side by side
The table compares the models on the things owners ask about most. Sort any column, or read down one to see how the risk moves.
Pay models compared
| Booth or suite rent | The renter keeps takings, pays rent | The renter carries it | The renter keeps it | Established people with their own clients |
|---|---|---|---|---|
| Flat per service | A fixed amount for each service done | Both earn less | The person earns more per head | Fixed-price services |
| Hourly | Hours worked | The shop carries it | The person earns the same | Front desk, assistants, new trainees |
| Hybrid | An hourly floor plus commission | The floor protects the person | Commission adds on top | New hires building a book |
| Percentage commission | A share of each service | Both earn less | Both earn more | Chairs the shop fills with its own clients |
| Tiered commission | A rate that rises after a threshold | Both earn less, at the base rate | The person’s share rises | Rewarding a full book |
General description of each model, not NextUp Walk-in settings. Employee or renter status depends on the facts of the work and your state’s rules.
Settle these before you choose
- Who brings the clients. If the shop’s sign, line and reputation fill the chair, commission is the honest model. If the person arrives with their own book, rent may be.
- Who sets prices and hours. A person who cannot set either is hard to call a renter.
- Who buys supplies and tools. Under rent, the renter does. Under commission, the shop usually does.
- What a slow week looks like. Write down who absorbs it before it happens.
- How tips are handled. Tips belong to the person who earned them under every model. Decide who covers the card processing fee on a tip and say so in writing.
- How it is written down. A one-page agreement with the model, the rates, the rent and the pay period prevents most arguments.
None of this is legal or tax advice. The agreement and the worker classification are worth a conversation with an employment attorney or your state labor department, because the rules differ by state.
How NextUp Walk-in handles it
Each person gets their own setup, and the models sit side by side in one business. On the Payouts page you choose commission, tips, booth rent or suite rental per person, and a location can follow its own setup. Card payments, tips included, are charged on your own Stripe account, and NextUp Walk-in never holds your money.
For commission you set a percentage or a flat amount per service, tiers if the rate changes after a threshold, and a rate for one service if it needs its own. At the end of a period you pick the dates and run the report. It lists each person’s revenue, tips and commission owed from completed visits that had a price, and it leaves out no-shows and removed check-ins. Statements download as a PDF in your logo and colors, or as CSV or Excel.
Both sides see the numbers. The owner sees everyone’s totals and the pay ledger. A team member who signs in with their own email sees their own earnings on their book and can download their own statement, less rent and advances where those apply. NextUp Walk-in shows what each person is owed, and your business pays its team and marks the statement paid.
Team pay statements are on every plan that takes payments. Commission, booth rent and payroll files are on Pro, and the 14-day trial has every Pro feature. Details: commissions and tip pools, payroll and booth rent, tips and team pay, barbershops, hair salons, pricing.
Pay everyone from one record
Questions
Is commission or booth rent better for the shop?
Rent gives the shop a steady amount whatever the week brings, and commission gives it a share of a busy week. Neither is better in general. It depends on who brings the clients and who carries a slow week.
Can one shop use commission and booth rent together?
Yes. Each person has their own setup, so a commission chair, a booth renter and a suite renter can sit in the same business.
Does NextUp Walk-in pay my team?
No. It shows what each person is owed on a statement, and your business pays its team and marks the statement paid.
Which plans have commission and booth rent?
Commission, booth rent and payroll files are on Pro and the Restaurant plan. Team pay statements are on every plan that takes payments.