Commission employee or booth renter? It's one of the most important decisions in a stylist's career, and there's no universal right answer. Each model has real advantages and real drawbacks. The best choice depends on your career stage, financial situation, clientele size, and personal goals. This guide breaks down both paths honestly.
Commission Employment Explained
As a commission employee, you work for the salon and earn a percentage of the services you perform. The salon handles everything else.
- Earn 40-60% of service revenue (varies by salon and experience)
- Salon provides clients through walk-ins and marketing
- Salon handles booking, supplies, and all business operations
- You're a W-2 employee with taxes withheld
- May include benefits (health insurance, PTO, education)
- Salon sets your schedule and policies
Booth Rental Explained
As a booth renter, you're an independent contractor running your own business within a salon space.
- Pay weekly or monthly rent ($150-$700+ depending on market)
- Keep 100% of your service revenue after rent
- You're responsible for your own clients and marketing
- Handle your own supplies, products, and tools
- You're a 1099 contractor—handle your own taxes
- Set your own schedule, prices, and policies
Financial Comparison
Let's compare real numbers. Assume a stylist generating $2,000/week in services.
- Commission (50%): Take home ~$1,000/week before taxes
- Booth rental ($400/week): Take home ~$1,600/week before taxes and expenses
- But: Booth renters pay ~15% self-employment tax
- But: Booth renters buy their own supplies ($100-200/week)
- But: Booth renters need their own insurance ($50-100/month)
- Net difference varies—often $200-400/week more for rental IF you have clients
Pro tip: The math only works for booth rental if you have consistent clients. Without them, you're paying rent with no income.
Commission: Pros & Cons
Commission employment offers stability and support but less control and earning potential.
- ✓ Steady income, even during slow periods
- ✓ Salon provides clients and marketing
- ✓ Benefits (health insurance, PTO) at many salons
- ✓ Education and training often provided
- ✓ Less administrative burden
- ✗ Lower earning ceiling
- ✗ Less control over schedule and policies
- ✗ Limited ability to set your own prices
- ✗ Income tied to salon's success
Booth Rental: Pros & Cons
Booth rental offers freedom and higher earning potential but requires business skills and comes with risk.
- ✓ Higher earning potential with established clientele
- ✓ Complete control over schedule
- ✓ Set your own prices and policies
- ✓ Build your own brand and business
- ✓ Tax deductions for business expenses
- ✗ No income if you have no clients
- ✗ Must handle all your own marketing
- ✗ Responsible for supplies, insurance, taxes
- ✗ No benefits unless you buy them yourself
- ✗ Isolation—less team support
Commission Is Better When...
Commission employment is often the right choice in these situations.
- You're new to the industry and building skills
- You don't have an established clientele yet
- You value stability and predictable income
- You want benefits like health insurance
- You prefer a team environment with support
- You don't want to manage business operations
- You're in a new location and need to build clients
Booth Rental Is Better When...
Booth rental makes sense in these situations.
- You have a full, loyal clientele
- You're earning consistently high revenue ($1,500+ weekly)
- You want maximum control over your business
- You're comfortable with business management
- You can afford your own insurance
- You value flexibility over stability
- You're ready to build your personal brand
When to Make the Switch
Transitioning from commission to rental is a big step. Don't rush it.
- Wait until you're consistently busy (80%+ booked)
- Build a 3-6 month financial cushion first
- Ensure your clients will follow you
- Understand your true business costs
- Have a marketing plan for acquiring new clients
- Consider starting with a lower-rent option
- Talk to other booth renters about their experience
Frequently Asked Questions
Generally, booth rental becomes advantageous when you're consistently generating $1,500+ weekly in services with stable clients. Below that, commission often provides better security. Run the numbers for your specific situation including all expenses.
Yes, but it may feel like a step backward and involve a pay cut. Some stylists return to commission for stability, benefits, or a fresh start in a new market. There's no shame in choosing stability.
Salon suites (private rooms in a suite building) offer more privacy and independence but higher rent ($800-$1,500+/month). Traditional booth rental in a salon is cheaper but less private. Suites make sense for very established stylists.