Commission % ......

[meme]

Hi!

I need advice about commission as a self-employee.

I'll start working as a self-employed nail tech at a hair salon.
The salon manager said she takes away VAT from what clients pay first and I will take 30% of the rest as a commission.

So I'll get about 25% of what clients pay.... I guess.
(correct me if I'm wrong)

I don't have to pay anything for products (the salon supplies).
I pay own tax etc.
I have 3 years of experience in this industry.

Based on these, is this commission rate fair?

My biggest concern is, they have no clients base for nails as they just starting out nail services in their hair salon.

Compare to the earnings when I rented a space in different salon previously, I feel this commission is not good.

Please let me know what you think!

Meg

 

[sian1979]

i was being paid hourly in my last salon and for some reason i ended up supplying my own products.....it just went that way and i probably shouldnt have let it...hey ho!!.....anyway i was thinking of going self employed there but was told by someone else who was self emplyed that because the salon owner was VAT regestered she would charge me the VAT on what i took....so i would do a 60/40% split to me plus charge me 15% VAT...... i personally didnt get it and never heard of it being done like that so stayed for a bit as employed but have now set up on my own in another salon with just a straight forward 60/40 split.... nothing else!
If you feel it is unfair then may be try and negociate another rate..... if that fails see if there are any other places out there that you will well in.

 

[Exquisite Touch]

hi hun

I pay my girls 40% of what they earn, as ive only been open for 7 weeks and I have clients coming in but some weeks im mad busy and other weeks its slow we are averaging 4 new clients a week . But I always make sure the girls take some kind of wage home as they are a god send to me. I supply all the products all the girls have to do is turn up for work.

The girl i have working for me at the moment does 5 days, she understands that im a new business and her words to me were you dont get out what you dont put in. I'm lucky to have her as she is a very committed worker and the clients adore her.

I rented rooms above a hair salon I paid £90 and supplied all equipment, furniture but paid no electric,gas or rates no one knew i was there, some days i earned nothing and i hated sitting there doing nowt. So when the new place turned up in 7 weeks ive more than tripled what i earned.

Is the salon on a good location and will they be advertising your services in and outside of the salon?
I'm lucky the client base I did gain from the hairdressers have followed me to my new salon.
I think 25% is very low and 40% is what you should be aiming for
hth
Debbie x

 

[meme]

Thank you very much Sian1979, Exquisite Touch.

Well, the salon location is not bad at all, it's 5 mins from Oxford Circus Station and the salon is advertising new nail business a lot.

I'm having a meeting with the manager on Wed and want to negotiate about this once again.

So, I'm thinking of printing out this page and show her.

That would be great if you guys post more comments to help me out!!

Meg X

 

[catsaremad]

Hi

I will start at a hair dressers in a couple of weeks self employed providing manicures and pedicures until I pass my EzFlow course then will be able to offer Gel enhancements etc on top. I will be providing all my own products/equipment and I will be there on saturdays as I already work full time (doing mobile evenings) I have negotiated with the salon manager that I will give her 20 % of what I make until I have built my client base then can renegotiate to a fixed rate per saturday.

I have never heard of taking the VAT off before ?????? I will check this out at work on Monday and see what my collegues think (Work at an accountants)

 

[angelina221]

I pay 60/40 split. If i supply the products then i take 60% but if i don't then i take 40%. I'm VAT registered but i don't charge extra.

 

[fozzyo]

That sounds far too low to me!! When I was working on commission I took home 50%, and that was due to rise after a year (unfortunately the place closed).

And I would definately question the VAT. The owner is claiming that VAT back from HRMC against their own tax bill anyway so why should you be loosing out? What if a client pays by plastic they take out the authorisation %? The split takes VAT into account for their share of the costs.

Personally I wouldn't work for for less then a 60/40% split if they provide materials, 40/60% if I provide them and in that situation I get it writting any equipment I was to bring in they agree is mine. In the event of the company going into administration you need to have written evidence / agreement that they are your assests not the salons or you can loose them.

Mat

 

[fozzyo]

Just to add to this - whenever you consider if the % is ok work out the following.

1) How much do you need to get paid a week (take home)?
2) What do you expect the average client treatment to cost?
3) What will be your pay per client?
4) How many clients are you expecting a week?
5) How much will that earn?
6) How many clients do you need a week to cover your costs in question 1?

If 5 is below 1 and 6 is a lot higher then 4 then the commission is definately too low!

Mat

 

[catsaremad]

Hi

I have checked with my collegues about the vat and it does appear to above board however it has raised the questiob as to whether you are actually' self employed' You are probably self-employed if you:

run your own business and take responsibility for its success or failure
have several customers at the same time
can decide how, when and where you do your work
are free to hire other people to do the work for you or help you at your own expense
provide the main items of equipment to do your work

I have posted a link which can work out your employmenr status.

HM Revenue & Customs:Employment Status Indicator

 

[meme]

Thank you Catsaremad, Angeline221, Fozzyo.

I tried out "Employment Status Indicator", I'm now officially Self-employed!:lol::lol::lol:
(the questions were bit tricky, though)

Anyway, I'll see how it goes on the meeting.

I love this forum cos so many people are always willing to help each other!

BIG:hug: