How specialists' pay is calculated - percentage, rate, fixed, piecework and chair rent

Calculating specialists' percentages by hand at the end of the month is the owner's most expensive hour. The payroll module takes that work over, but first you describe once how exactly you pay. There are seven schemes, and almost every salon gets by with two or three.

Payroll is available on the Salon plan and above.

Seven pay schemes

Percentage of revenue. The specialist gets a share of the services they delivered, say 40 %. You can set a minimum below which pay will not drop in a bad month, and a maximum. The most common scheme for nail technicians, hairdressers and barbers.

Fixed rate. One amount per month regardless of revenue. Fits an administrator.

Hourly. A rate per hour worked and a higher rate for hours above the norm. The norm is 160 hours a month by default and can be changed. Handy for shift staff.

Combined. Several parts together: fixed plus percentage, or fixed plus hourly. Parts are added up, the largest is taken, or a weighted sum is used. The classic setup for an administrator who also sells cosmetics: a rate plus a percentage of sales.

Bonus. Extra payments for meeting conditions on top of the main scheme.

Piecework. Pay per unit of work done rather than per time or percentage.

Chair rent. The specialist does not receive from the salon but pays it: a fixed amount per period, a percentage of their own turnover, or both. The amount is prorated by the days the scheme was active and appears in the calculation with a minus sign. The total for a specialist on rent can be negative, and that is normal: it is what their debt to the salon looks like.

What to choose

Three typical setups:

• A specialist in a salon: percentage of revenue with a minimum. The minimum protects the specialist in the first month while there are few clients.
• A barber on rent: the "chair rent" scheme. If the barber is on a percentage, then a percentage without a minimum.
• An administrator: a combined scheme, fixed plus a percentage of product sales.

A scheme is assigned to an employee with a start date and, if needed, an end date. Changed the terms from the new month? Assign a new scheme from the new date and close the previous one. Old calculations then stay as they were. The system does not forbid editing amounts in an old scheme retroactively, but past periods would then recalculate differently, so it is better not to.

Advances

A specialist asks for part of the pay in advance. An advance goes through three states: requested, approved, paid. There is also a refusal.

Only paid advances enter the period calculation. An approved but not yet handed out advance is not deducted. This matters: if you handed the money over but the advance stayed "approved" in the system, the calculation shows a payout larger than the real one.

Penalties

A penalty is a deduction with a reason. There are five types: lateness, absence, violation, damaged materials and other. A penalty also goes through approval and enters the calculation only once approved.

The specialist does not see penalties in their account: the payroll section is available to those with the right for it, usually the owner and the administrator. So tell the specialist about a deduction in words before they see the payout amount.

Taxes

For Ukraine there are six ready-made tax schemes, one of which is chosen per company:

• standard: income tax 18 %, military levy 1.5 %, unified social contribution 22 %;
• simplified: only the unified social contribution 22 %;
• sole proprietor, groups 1, 2 or 3;
• minimal.

Each tax has a payer: employee or employer. Employee taxes reduce the payout; employer taxes are shown as a separate line and do not affect it.

Taxes are switched on for the whole company, not per employee. If part of the team is registered differently, it is easier to leave taxes off and count them where you count them now.

The period calculation

A calculation is made for a period, usually a month. It goes through the states draft, calculated, approved, paid. Until it is paid, you can recalculate as many times as you like after editing visits, advances or schemes: the old result is replaced by the new one. Once marked "paid" it is locked. If a mistake surfaces after payment, the payment can be cancelled and the period recalculated.

For each specialist the calculation shows separate lines: rate, hourly part, percentage, bonuses, piecework, product sales commission, tips, penalties, rent, advances, employee and employer taxes, the total and the payout.

What the specialist sees

The pay calculation is not shown to the specialist. In "My day" they see their service revenue and tips for the day and the month. That is revenue, not pay: how much of it belongs to the specialist depends on the scheme, and the owner tells them that figure.

Where to start

Set up a scheme for one specialist, run the calculation for last month and compare it with what you paid. If the numbers match, set up the rest. If not, the difference is most often that some visits last month were not completed in the system, so their revenue was not counted.