Booth rental and commission represent fundamentally different approaches to working in a salon. Commission stylists are employees earning a percentage of services, while booth renters are independent business owners who pay rent for their workspace. This choice affects your income, taxes, schedule flexibility, and career trajectory.
Compare: Booth Rental vs Commission Employee
Booth Rental
Rent a chair or suite from a salon and operate as an independent business owner. You set your own prices, hours, and keep all revenue minus rent.
Typical Earnings
$50,000-$120,000+/year (highly variable)
Pros
- +Keep 100% of service revenue (minus rent)
- +Set your own prices and schedule
- +Complete creative freedom
- +Build your own brand and business
- +Tax deductions for business expenses
- +No income ceiling
Cons
- -No guaranteed income - must pay rent regardless
- -Responsible for own supplies and products
- -No employee benefits (health, PTO)
- -Must handle own taxes (self-employment tax)
- -Responsible for own marketing and client acquisition
- -Less support and mentorship
Best For:
Experienced stylists with established clientele, entrepreneurial mindsets, those wanting schedule flexibility, and high-earners looking to maximize income.
Commission Employee
Work as a salon employee earning a percentage of services performed. The salon provides clients, supplies, and handles business operations.
Typical Earnings
$35,000-$75,000/year
Pros
- +Steady client flow from walk-ins and salon marketing
- +Supplies and products provided
- +May include benefits (health, retirement)
- +Less administrative burden
- +Mentorship and team support
- +W-2 simplifies taxes
Cons
- -Keep only 35-60% of service revenue
- -Less schedule flexibility
- -Must follow salon policies
- -Income ceiling based on commission rate
- -Less control over pricing and services
- -Building clientele benefits the salon too
Best For:
New stylists building skills and clientele, those wanting stability and benefits, team-oriented professionals, and those preferring less business responsibility.
Understanding Booth Rental
Booth renters are independent contractors (or sole proprietors) who rent space from a salon. You're essentially running your own mini-business within the salon's physical space. Rent structures vary widely based on location and amenities.
- Weekly rent: $150-$500+ depending on location
- Monthly rent: $600-$2,000+ in major metros
- Some include utilities, Wi-Fi, towels
- Premium locations command higher rent
- Suite rentals offer more privacy
- You're a 1099 contractor, not an employee
The Business Side of Booth Rental
As a booth renter, you're a business owner with corresponding responsibilities. This includes obtaining licenses, managing finances, and handling all aspects of your operation.
- Business license and liability insurance
- Self-employment tax (approximately 15.3%)
- Quarterly estimated tax payments
- Track all expenses for deductions
- Supply your own products and tools
- Handle your own booking and payments
- Market yourself independently
Financial Comparison
The financial picture differs significantly between the two models. While booth renters keep more per service, they have more expenses and no guaranteed income.
- Commission: Lower per-service income but no overhead
- Booth: Higher per-service income but pay rent and expenses
- Commission: Simple W-2 taxes
- Booth: Complex self-employment taxes with deductions
- Commission: May receive benefits worth $5,000-$15,000/year
- Booth: Must purchase own health insurance
- Breakeven point: Usually 15-25 clients/week for booth to match commission
When to Make the Switch
Many stylists transition from commission to booth rental as they build their career. Consider these factors before making the switch.
- Have a loyal clientele that will follow you
- Book 70-80%+ consistently on commission
- Comfortable with business management
- Have 3-6 months expenses saved
- Understand your true costs and breakeven
- Ready for marketing and self-promotion
- Know your local legal requirements
Legal Considerations
The IRS has strict rules about who qualifies as an independent contractor vs employee. Misclassification can result in penalties for both parties.
- Booth renters must have genuine independence
- Cannot be required to follow salon schedules
- Must control their own pricing and methods
- Salon cannot dictate specific work hours
- Should have written rental agreement
- Check your state's specific rules
Calculate Your Breakeven Point
Determine how much you need to earn for booth rental to make financial sense.
Frequently Asked Questions
Booth renter income varies dramatically based on clientele, location, and prices. Successful booth renters often earn $50,000-$100,000+, while some in premium markets exceed $150,000. However, after expenses (rent, supplies, insurance, taxes), take-home may be similar to a senior commission stylist.
Booth rental is worth it for stylists with established clientele, entrepreneurial drive, and desire for independence. If you're already booking 70%+ on commission and your clients would follow you, booth rental often provides higher earnings and more flexibility.
To cover typical booth rent and expenses while earning a good income, most stylists need 15-25+ clients per week minimum. Calculate your specific breakeven based on your rent, expenses, average ticket, and income goals.
Yes. Booth renters pay self-employment tax (15.3% for Social Security and Medicare) on top of income tax. However, they can deduct business expenses like rent, supplies, education, and mileage. Quarterly estimated taxes are typically required.