Free tool · Salon Pricing Calculator
Booth rent vs commission calculator
Renting a booth pays more than commission once your monthly service revenue passes the breakeven: (rent + other fixed costs) ÷ (1 − product share − card-fee share − commission kept + backbar charge). With 1,600 rent, 300 of costs, 5% product, 3% card fees, a 50% split and 5% backbar, that is 4,042.55 a month.
Monthly amounts in your own currency, percentages as numbers (50 = 50%). Nothing you enter leaves your browser.
Sample month: renting 5,460.00, commission 3,600.00. Turn on JavaScript to enter your own.
How do you compare booth rent and commission?
Put both on the same footing: the cash each one leaves you in a month, before income tax, from the same service revenue. Salon Pricing Calculator does exactly that, and this page uses its formulas unchanged.
- Renting = revenue × (1 − product share − card-fee share) − booth rent − other monthly costs.
- Commission = revenue × (commission kept − backbar charge) − any costs you carry as an employee.
- Breakeven revenue = (rent + other costs − employee costs) ÷ (1 − product share − card-fee share − commission kept + backbar charge). Above it renting keeps more; below it commission does.
The asymmetry matters. As a renter you pay for product and card processing yourself, so they scale with what you sell. On commission the salon pays for them and keeps its half of the ticket instead.
Worked example: 8,000 a month in services
A stylist brings in 8,000 a month. The booth costs 1,600 a month plus 300 of other costs; product runs 5% of revenue and card fees 3%. The salon offers a 50% commission with a 5% backbar charge.
- Renting
- 8,000 × (1 − 5% − 3%) − 1,600 − 300 = 5,460.00
- Commission
- 8,000 × (50% − 5%) = 3,600.00
- Difference
- renting keeps 1,860.00 more a month
- Breakeven
- (1,600 + 300) ÷ (1 − 5% − 3% − 50% + 5%) = 1,900 ÷ 0.47 = 4,042.55
- Cash at breakeven
- both models leave 1,819.15
At 3,500 a month the picture flips: renting leaves 1,320.00 and commission 1,575.00. The decision is not about the split alone; it is about whether your book is full enough to carry the rent. If rent is quoted weekly, 400 a week is 1,733.33 a month, a difference that is easy to miss.
What does this comparison leave out?
Cash before tax is only part of the decision. An employee on commission may receive benefits, paid time off and an employer share of payroll taxes that a renter pays as self-employment tax. A renter sets their own prices, hours and product line, and keeps every client relationship. Neither column values those things, and the calculator does not pretend to.
Two practical steps make the numbers honest: use a realistic monthly revenue from your own booking history rather than a hoped-for one, and price your services for the rent before you move, using the hourly rate calculator with the booth rent included. Whether you are an employee or an independent contractor is a legal question with its own tests; the IRS page in the sources explains them.
Sources
Questions people ask
Is booth rent or commission better for a hairstylist?
It depends on your monthly service revenue. Below the breakeven revenue commission leaves you more cash; above it renting does. With 1,600 rent, 300 of other costs, 5% product, 3% card fees, a 50% split and a 5% backbar charge, the breakeven is 4,042.55 a month.
Why is product cost only on the booth side?
On commission the salon buys the color and backbar product, sometimes charging you a backbar fee instead. As a renter you buy your own, so it comes out of your revenue. Putting product on both sides is the most common mistake in these comparisons.
Does the comparison include income tax and benefits?
No. Both figures are estimated monthly cash before income tax, and the commission side does not value benefits, paid time off or the employer’s share of payroll tax. Weigh those separately; a tax professional can tell you what self-employment tax means for you.
What if my booth rent is weekly?
Switch the rent to weekly. It is converted to a month as weekly rent × 52 ÷ 12, so 400 a week counts as 1,733.33 a month, not 1,600.
What does "no breakeven" mean?
That the commission you would keep is so high, compared with your product and fee costs, that one model keeps more at every revenue. The calculator then says so instead of printing a meaningless number.