Commission or hourly rate — what adds up in a small team

The question comes back with every new person on the team: a percentage of turnover or a fixed hourly rate?

The answer "it depends" is true but useless. Let us try to be more concrete — because in a small salon, where three people work, both models break down in a very predictable way.

How commission breaks down

Commission sounds fair: the more you earn for the salon, the more you earn for yourself.

The trouble starts the moment not everyone has equal access to clients. Someone working Tuesdays and Wednesdays will handle less in a month than someone taking Fridays and Saturdays. Not because they work worse — because more people simply come in on a Friday.

After three months you hear the lines every owner knows:

"Because she gets the better slots." "Because you always put me down for Mondays."

And that conversation is never about money. It is about the schedule. But it plays out at payday, because that is where the effect first shows.

The second problem with commission is services with different margins. Colouring takes three hours and costs a lot. A cut takes forty minutes and costs little. With one flat percentage for everything, an employee quickly learns what they would rather not take on — and starts gently steering clients towards what pays them better.

How the hourly rate breaks down

An hourly rate settles the argument about the schedule: you pay for time, not for who happened to land a Saturday.

In exchange it moves all the risk onto you. An empty afternoon costs you exactly as much as a full one. In January, when the salon is quieter, you are paying for presence, not for work.

There is a subtler cost too: with a pure hourly rate, nobody has a reason to speed up. This is not about rushing clients, but about a natural difference — one person does a manicure in an hour, another in an hour and a half, and on an hourly rate the second one earns more for the same service.

The third way most people take

In practice, small salons end up on a mixed model: an hourly base plus commission on turnover.

The base gives the employee security — they know that in a lean month they will not be left with nothing. The commission gives them a reason to look after clients, sell additional services and go back to people who have not been in for a while.

You set the proportions according to how much risk you want to carry: the higher the base, the more risk sits with you and the less tension there is in the team. The higher the commission, the more pay follows results — and the more important it becomes that the schedule is visibly fair.

Where the problem really sits

Notice that none of these arguments is an argument about the pay model. They are all arguments about numbers nobody can see:

• how much each person actually worked,
• how much turnover went through whose hands,
• whether the schedule was shared out evenly.

As long as those three things live in a notebook and in your head, every pay model will generate arguments — because both sides have only their own version and neither can prove it.

How it works in Kepili

Kepili does not pick the model for you. It does something more important: it stops the numbers being a matter of memory.

You set rates and commissions per person. An hourly rate, a commission percentage, or both at once. Everyone has their own configuration — there is no single golden rule that will suit everybody.

Rates have a history. This is the thing you will appreciate at the first mid-year raise: old months are counted at the old rate. You do not have to remember when the new one started, and you do not recalculate backwards.

Commission is counted from the revenue of the appointments served. You retype nothing from the calendar — an appointment closed with a given employee goes into their result automatically.

You see the pay summary in one place: hours, commissions, total to pay. For every employee, for any month you choose.

Reports show whether the schedule is fair. Number of appointments, turnover and the average value of an appointment per person. That is material for a conversation with no "it seems to me" in it. If someone genuinely has worse slots, you will see it in the numbers before you hear about it at payday.

If you run more than one salon, there is one more thing: an employee serving clients in two locations can have separate settlements that do not get mixed together.

What to choose

The short answer, if you are starting out:

• You work alone — the model does not matter, only that you can see revenue and costs.
• One or two people at the start — an hourly base plus a small commission. Security for them, predictability for you.
• A team with an established client base — a higher commission makes sense, because turnover is no longer a lottery.

But whatever you choose: start by measuring hours and turnover per employee. A pay model without that data is guesswork, and guesswork about money always ends in loss, stress and trouble.

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Create an account and use the full Business plan for 30 days — no limits, no complicated contract and no card. Set the rates, work a month, and see what settling up looks like when the numbers count themselves.