How to use the chair rental vs commission calculator
- Enter the service revenue you expect in a normal month of your own.
- Enter the monthly chair or booth rent and the share the shop keeps if you worked on commission instead.
- Open More options to enter the supplies you would buy yourself when renting and any you would pay for on commission.
- Read the take-home for each arrangement, the break-even revenue and the table that shows both at other levels.
Formula
Renting = revenue x (1 - supplies % when renting) - rent
Commission = revenue x (1 - shop share % - supplies % on commission)
Break-even revenue = rent / (shop share + supplies on commission - supplies when renting)
Rent is a fixed cost and commission is a percentage, so renting beats commission above the break-even revenue and loses below it. If the percentage you give up is smaller than your own supply costs, commission wins at every level and there is no break-even.
$6,000 of services, $1,200 rent and a 40% commission split
Renting: you keep $6,000 less 8% for your own supplies ($480), then pay $1,200 rent, so you take home $4,320. On commission the shop keeps 40%, so you take home $3,600. Renting pays $720 more a month.
The break-even revenue is 1,200 / (0.40 + 0 - 0.08) = $3,750. At $3,750 both pay $2,250. At $500 of revenue renting would leave you $740 in the red, because the rent is due however busy you are.
What the break-even tells you
If your revenue is well above the break-even, renting rewards a full book. If it is near or below, commission shifts the risk to the shop. A new stylist still building a client list often has a low and uneven month, which is where the fixed rent bites hardest. Run the numbers at your slow months as well as your best ones.
What the numbers leave out
Each model comes with other terms. A shop may provide clients, a front desk, product, laundry and insurance on commission, while a renter handles their own booking, taxes and supplies. Who owns the client list and how each arrangement is classified for tax and labor purposes depends on where you work. Get the terms in writing and ask a qualified adviser.
For related checks see the Commission Calculator, the Agent Commission Split Calculator and the Freelancer Take-Home Calculator.
Assumptions and limits
- Revenue is service income before tips, and the same percentages apply at every revenue level.
- Supplies are a share of revenue, and rent is a fixed amount each month.
- Taxes, insurance, licenses and booking costs are not modeled.
- Nothing is uploaded. Calculations run in your browser.
Frequently asked questions
What is a fair commission split?
There is no standard split. It depends on what the shop provides, such as clients, supplies and a front desk. Enter the split you are offered and test how sensitive the result is by trying a few nearby values.
Why can renting lose money?
Rent is due whether or not you have clients. If revenue falls below the rent plus your own supplies, you keep less than nothing for the month. Commission has no fixed cost, so it cannot go below zero.
Should I include tips?
Tips usually stay with the stylist in either arrangement, so leave them out of service revenue. Compare the two models on service income alone and add tips to both afterward.
What if the shop provides supplies for renters too?
Enter 0 for supplies when renting. The break-even then equals the rent divided by the shop share. For example $1,200 / 40% = $3,000.