Tiered stylist commission explained, with a worked example

Tiered stylist commission pays a stylist one percentage on their service revenue up to a threshold, and a higher percentage on everything above it, within a pay period. It is the most common way salons reward their busiest stylists without raising the base rate for everyone.

It is also the most common source of payday arguments, because nobody can check the maths. This guide fixes that.

How does tiered commission work?

Pick a period (a week, two weeks or a month), a threshold and two rates. For example:

• 40% on service revenue up to 2,000 in the period
• 45% on service revenue above 2,000

A stylist who brings in 2,650 in services earns 40% of 2,000 (800) plus 45% of 650 (292.50) = 1,092.50. Only the revenue above the line earns the higher rate. That is the part people get wrong: the higher rate does not apply backwards to the whole amount.

Should retail be paid at the same rate?

No. Retail has a lower margin than services and a different job: you want stylists to recommend, not to push. Most salons pay 10–15% on retail, credited to the stylist who recommended it. In the worked example below, 310 of retail at 10% adds 31.

What is a product-cost deduction?

Colour services use expensive product. If you pay 45% commission on a 200 colour service that used 30 of product, the salon is paying commission on its own tubes. A product-cost deduction removes a fixed amount (or a percentage) from the service before commission is calculated. Set it per service.

What happens with splits and refunds?

• Splits: when a colourist applies and another stylist cuts and finishes, split the line (for example 60/40). Each share earns at its owner’s rate.
• Refunds and redos: commission is on what the client finally paid. A refund reverses commission in the period it happens.
• Discounts: commission follows the discounted price, so decide who approves discounts.

The full worked example

Line	Revenue	Rate	Commission
Services up to the tier	2,000	40%	800.00
Services above the tier	650	45%	292.50
Retail recommended	310	10%	31.00
Refund: toner redo	−40	45%	−18.00
Total	2,920		1,105.50

Tips (say 180) are paid on top and listed separately.

How to introduce tiers without a revolt

1. Model the new plan on the last three months of real data for each stylist.
2. Make sure nobody earns less on the same work.
3. Explain it with one worked example like the table above.
4. Give stylists access to their own report so they can check during the period, not just at payday.

In GetSalonPOS, commission rules are set per stylist or per level, tiers are included from the Salon plan, and the report lists every ticket line with the rate applied.