Who pays for color, backbar, towels and laundry under each arrangement
In a commission salon, the house pays for most essential supplies. That includes hair color, developer, shampoo, conditioner, backbar products, towels, and the cost of cleaning those towels. The stylist uses what is provided. Some salons have limits or chargebacks if a stylist exceeds a certain amount of color, but this is rare for average usage.
With booth rental, the renter covers these costs directly. You buy your own color, developer, foils, gloves, and backbar products. You also buy towels and either wash them yourself or pay for laundry service. Some landlords provide towels and laundry as part of the rent, but this is less common. The renter controls product choice, quality, and inventory. If you want to use high-end color or eco-friendly shampoo, you pay for it out of your own pocket.
On paper, the commission stylist has less out-of-pocket spend, but less autonomy. The booth renter has full control, but pays for every ounce, every load of towels, and every bottle on the backbar. Over a month, these costs can add up. A stylist who does a lot of color corrections or specialty services will notice the difference more.
Keep reading: Seven Color Pricing Mistakes That Eat a Colorist's Margin
Fixed rent against a variable commission split
Commission salons pay stylists a percentage of every service performed. The house sets the price, collects payment, and pays the stylist a split. Typical arrangements range from 40 to 60 percent to the stylist, depending on seniority and the salon's pricing structure. Some salons offer a sliding scale that increases with sales volume, but the share always fluctuates with how much business you do.
Booth renters pay a fixed weekly or monthly fee for their chair. The rent covers the physical space, and sometimes utilities and basic amenities. Rent does not change if you are busy or slow: the same amount is due every cycle. Most renters collect the full price of each service and keep all the revenue after covering their rent and expenses.
The main difference is predictability. Commission splits protect you during slow periods, as you never owe more than you take in. Renters take on the risk. If you have a bad week, the rent still comes due. If you are busy, the upside is yours: after rent and supplies, every new client is profit.
Taxes: payroll withholding versus self-employment tax and quarterly estimates
Commission stylists are usually treated as W-2 employees. The salon withholds Social Security, Medicare, and federal and state income tax from your paycheck. At the end of the year, you receive a W-2 and may get a refund or owe a small amount when you file, depending on your withholdings.
Booth renters are independent contractors, treated as self-employed. No taxes are withheld from your earnings. You are responsible for paying your own Social Security and Medicare as self-employment tax. This is roughly 15 percent of your net income, plus federal and state income tax. You must estimate and pay these taxes quarterly to avoid penalties. Record keeping and discipline matter here: renters who do not set aside money may face a large tax bill in April.
Payroll tax filings and unemployment insurance are handled by the salon for commission stylists. For renters, all this is on your shoulders. Many stylists choose to use an accountant or tax software to stay out of trouble. The burden is higher, but so is the potential for deductions. Renters can deduct rent, supplies, marketing, insurance, continuing education, and even a portion of mileage or a home office.
Keep reading: Booth Renter or Employee: The Tests That Decide Your Status
Who owns the client list, the price sheet and the schedule
In most commission salons, the business owns the client list. The salon controls the schedule, sets prices, and keeps records. If a stylist leaves, the salon may continue to serve those clients, and may not share their contact information with the departing stylist. Some salons enforce non-solicitation agreements, limiting a former employee's ability to contact clients directly for a period.
Booth renters own their client list. You manage your own contacts, pricing, and booking. If you move to a new location, clients are yours to invite. The price sheet is yours to set, though some landlords set a floor to avoid price wars. The schedule is also yours: you decide your hours, appointment length, and days off.
This autonomy can be a draw for renters. With it comes the need for good record keeping and consistent client communication. Many renters use booking apps, spreadsheets, or pen and paper to manage appointments and client notes. If you do not have an organized system, clients can fall through the cracks during a move or busy season.
Retail sales, tips and how each model pays them out
In commission salons, retail sales are tracked by the house. Stylists typically earn a percentage of their own retail sales, which can range from 10 to 20 percent. The house keeps the rest. The stylist is only paid for what they sell; walk-in or front desk sales are usually credited to whoever closed the deal. Tips are collected through the salon's payment system and paid out in cash, on the paycheck, or through a mix, depending on the setup.
Booth renters keep 100 percent of their retail sales, but must purchase inventory themselves and manage stock. Some renters opt out of retail entirely, while others build a side business from it. You set your own margins, choose which brands to carry, and decide whether to offer retail at all. Tips go directly to the renter, either as cash or via credit card. The renter processes their own tips, and must track and report them for tax purposes.
One key difference: renters face upfront costs and risk of unsold inventory, but capture the full retail profit. Commission stylists have no inventory cost, but receive only a portion of the sale.
See how ShearHold handles this for beauty and salons
Insurance, continuing education and supplies that only renters buy
Commission salons often provide liability insurance as part of their coverage for employees. Some also pay for or subsidize continuing education, product classes, or industry shows. Supplies such as cleaning products, basic tools, and PPE may be stocked by the house. The stylist still needs to buy their own shears and personal tools, but day-to-day consumables are included.
Booth renters must carry their own liability insurance. Many landlords require proof of policy before renting a chair. This insurance covers the stylist if a client is injured or claims damage. Renters also pay for their own continuing education, licensing renewals, and professional memberships. Most renters budget for ongoing classes, as keeping current is a must in the industry. Every supply, from brooms to appointment cards, is an out-of-pocket expense.
The paperwork and cost add up. Renters who want to stand out with advanced training or higher-end supplies pay for this themselves, but can choose where to spend. Commission stylists may have less choice, but fewer bills to juggle.
Running the same 30 client week through both structures
Commission model: A typical week
Picture a stylist working 30 clients in a week, with an average ticket of $75. Total service revenue is $2,250. In a 50 percent commission salon, the stylist takes home $1,125 before taxes. The salon provides color, backbar, towels, laundry, and processing. Tips are paid out as earned, and retail commission adds a small amount. Payroll taxes are withheld from each check. If the week is slow and only 20 clients come in, the stylist's pay drops proportionally, but there is no fixed bill to pay.
Booth rental: Crunching the same week
The same 30 clients at $75 each bring in $2,250 in gross revenue. Rent for the week is due, say $250. The stylist pays out of pocket for color, backbar, laundry, insurance, and all business expenses. Supplies and product for a week of 30 clients might run $100 to $200, depending on the mix of services. Liability insurance, if broken down weekly, might be another $10. After all expenses, the stylist keeps the remainder. No one withholds taxes, so self-employment tax and income tax must be calculated and set aside.
The profit can be higher than a commission paycheck, especially as volume increases. If a renter has a slow week, they still owe the full rent and fixed costs. The risk is higher, but so is the reward for those who maintain a steady or growing book.
When staying on commission is genuinely the better deal
Commission salons remove many headaches for stylists who are building a book, cannot predict their schedule, or prefer to avoid the business side. When client numbers are low or inconsistent, the commission split protects the stylist from owing more in rent than they earn in service revenue. Stylists who rely on walk-ins or who do not want to manage inventory, insurance, taxes, or marketing often find commission the safer path.
Commission is also a good fit for those who value mentorship, team culture, and having a manager handle disputes, supplies, and maintenance. New stylists, or those returning after a break, can rebuild their clientele with less risk and more support. The downside is a ceiling on earnings, limited control over pricing or scheduling, and less freedom to market or brand yourself independently.
Renting a booth works best for stylists with an established clientele, a clear plan, and the discipline to handle paperwork and expenses. The upside is real, but so is the risk if clients cancel or business slows suddenly. Both paths have trade-offs, and the best choice depends on your goals, risk tolerance, and work style.
For those who do move to booth rental, tools that handle deposits, track no show fees, and offer easy rebooking can take much of the administrative sting out of independent work. Systems that automate the business side let you focus on clients and services, instead of chasing payments or juggling texts.
