Written for owners of hair salons, barbershops, beauty, nail, lash and brow businesses, spas and massage, tanning, tattoo and piercing studios and non-surgical aesthetics clinics in England, Wales, Scotland and Northern Ireland.
The short version
- Check commission against the minimum wage.Every pay period, divide pay, not counting tips, by all hours worked, including waiting for clients and cleaning down. Top up any shortfall.
- Pass on every tip in full.In Great Britain that includes card tips: nothing taken off but tax, no card fee, and paid by the end of the next month.
- Make self-employed labels match reality.Someone on set shifts at your prices, paid a share through your till, who cannot send a substitute, is very likely a worker.
Salons use three staffing models: employed (wage, commission or both), self-employed on commission, and chair or room rental. The middle one is the riskiest. A stylist on set shifts, with no right to send a substitute, on the salon's prices and paid a share of takings through its till is very likely a worker in law, whatever the agreement says.
Labels do not decide status
Personal service, mutual obligation and control decide whether someone is an employee, and a written contract that does not reflect reality does not decide it. Worker status, which brings the minimum wage, holiday pay and auto-enrolment, arises from personal service under the business's control even with a self-employed label. As of Oct 2026.
Ready Mixed Concrete v Minister of Pensions [1968] 2 QB 497; Autoclenz v Belcher [2011] UKSC 41; Uber BV v Aslam [2021] UKSC 5; Pimlico Plumbers v Smith [2018] UKSC 29
Barbers on the first terms are workers at least, owed minimum wage, holiday pay and auto-enrolment back to the start, and their takings fall into the shop's VAT turnover.
| Net service revenue from one employed stylist | £52,000 |
| Salary | -£26,000 |
| Employer National Insurance: 15% x (£26,000 minus £5,000) | -£3,150 |
| Minimum pension: 3% x (£26,000 minus £6,240) | -£592.80 |
| Product at 10% | -£5,200 |
| What the salon keeps from her | £17,057.20 |
| More than a chair renter paying £180 a week net of VAT (£9,360 a year) | £7,697.20 |
£17,057.20 minus £9,360Before holiday cover, sickness, the Employment Allowance and the status risk the rent model carries. April 2026 values. As of Oct 2026.
The minimum wage check for commission
The check is per pay reference period, which is up to a month: pay that counts for the minimum wage, divided by all hours worked. Hours include waiting for clients, compulsory training, cleaning down and meetings. Commission counts in the period it is paid, so a commission-only stylist in a quiet period may need a top-up.
| Commission: 40% of £1,000 net service takings in a 38-hour week (£10.53 an hour) | £400 |
| Top-up to the minimum wage | £82.98 |
| Minimum pay for the week: 38 hours x £12.71 (April 2026 value) | £482.98 |
Waiting time between clients counts as working time. Wage floors change each 1 April. As of Oct 2026.
Holiday pay on commission
Holiday pay for a stylist who regularly earns commission includes her average commission, not just basic pay. For leave years from 1 April 2024, irregular-hours workers accrue holiday at 12.07% of hours worked, and rolled-up holiday pay at 12.07% may be paid on its own payslip line: for example, £144.84 on £1,200 of pay in a month. The 12.07% rules cover Great Britain only; Northern Ireland has its own law. As of Oct 2026.
Lock v British Gas (C-539/12); Working Time Regulations 1998 regs 15B and 16A
The traps behind salons named for underpaying
- Unpaid trial shifts longer than a short assessment.
- Unpaid training days or model nights.
- Deductions or payments for uniforms, products, tools, courses or breakages that take pay below the floor (regs 12 and 13). For example, a £35 uniform deduction from an 18-year-old junior paid exactly £10.85, the April 2026 rate for 18 to 20 year olds, is an underpayment. As of Oct 2026.
- Training-cost clawbacks that do the same in the final pay period. Taper them, say 1/24 a month over 2 years, and never take the last pay below the minimum wage.
- Counting tips towards the wage. They never count (reg 10).
What an underpayment costs
HMRC, enforcing for the Fair Work Agency, can issue a notice covering up to 6 years. Arrears are paid at the current minimum wage rate where it is higher, and the penalty is 200% of the underpayment, with a £100 minimum and a £20,000 maximum per worker, reduced by 50% if all arrears and half the penalty are paid within 14 days. As of Oct 2026.
Employment Rights Act 2025 s.105(2); Fair Work Agency enforcement statement
Every tip goes to the team, in full
In Great Britain, every tip, gratuity and service charge, including card and booking-app tips, goes to workers in full, with no deductions other than tax, allocated fairly and paid by the end of the following month. You cannot take a card processing fee from tips. Where tips are more than exceptional you need a written tipping policy available to every worker, records of each tip and its allocation kept for 3 years, and an answer to a worker's request for them within 4 weeks. A tribunal can award up to £5,000 on top of the unpaid tips. Chair renters keep their own tips. As of Oct 2026.
Employment (Allocation of Tips) Act 2023, inserting Employment Rights Act 1996 Part 2A
When a stylist leaves with your clients
A restrictive covenant holds only if it protects a legitimate interest, such as your client connection, and goes no further than reasonable. For a stylist, a non-solicitation of clients she dealt with in the last 12 months, for 3 to 6 months, is the defensible norm; a town-wide non-compete for a year usually fails. Your client list is your confidential information and personal data, so a leaving stylist who downloads it commits a data breach and a breach of confidence: take advice quickly and decide within 72 hours whether to report it to the ICO. A chair renter's own clients are hers: put ownership in writing. As of Oct 2026.
Tillman v Egon Zehnder [2019] UKSC 32; UK GDPR
Tips are taxed either way, but the route matters. Paid through payroll, they carry PAYE and, if you decide the split, National Insurance too. Tips allocated by an independent troncmaster are free of National Insurance but still taxed through PAYE (SI 2001/1004, Sch 3 Part 10 para 5).
Asked in Greymill
Her pay: £400 / 38 hours = about £10.53 an hour
Minimum wage at 24: 38 x £12.71 = £482.98 (April 2026 rate, As of Oct 2026)
Top-up owed: £82.98
Check every pay period, and count every hour, including waiting for clients, cleaning down and compulsory training.
Tips: in Great Britain every tip, card tips included, goes to your workers in full by the end of the next month. Only tax comes off, never the card fee.
Underpaying costs: HMRC can go back up to 6 years, with a penalty of 200% of the underpayment, up to £20,000 a worker (As of Oct 2026).
A written tipping policy comes next; I will draft one if you like.
Ask it about your own business
Paste this into Greymill with your own figures, and Staff & HR works it through for your business.
I run a salon or beauty business in the UK. My team: [number] employed on [wage, commission or both], [number] self-employed on commission and [number] chair or room renters. For each commission stylist, here are hours worked including waiting time [hours] and commission paid [amounts] for the last [number] pay periods, plus any deductions [list]. Check every pay period against the minimum wage, tell me who looks like a worker rather than self-employed and what to change, and draft a written tipping policy for card and cash tips.
More for beauty, hair and aesthetics in the UK
- Pricing a colour or treatment so it still pays after commission and VATPrice each service from product cost and the stylist's time, then check what is left of every pound once VAT, commission and product come out.Read the lesson
- December was busy, so why is there no cash in February?Voucher, course and deposit money is service you still owe, no-shows are column hours you never get back, and a 13-week cash view shows both before they bite.Read the lesson
- Rent-a-chair and VAT: could HMRC say every stylist's takings are mine?Chair rent is VAT-able, and if the salon in reality supplies the haircut, every self-employed stylist's takings count towards your VAT turnover.Read the lesson
- Adding microblading, piercing, laser or lip filler: what do I need before the first client?Every salon has safety duties, and a treatment that breaks the skin, uses a laser or involves a prescription-only medicine adds licensing, age rules and insurance duties that differ in each of the four nations.Read the lesson
- Deposits, no-show fees and course packages: what can I actually keep?Booking terms only hold if clients see them before booking, they are fair, and they respect the rules on cancellations, courses, memberships and prices.Read the lesson
- Filling the book from Instagram, reviews and rebooking without breaking the advertising rulesRebooking, reviews and social portfolios fill a salon's diary, and each comes with its own rules on photos, influencers, reviews and prescription medicines.Read the lesson
- A client has reacted, been burned or had a filler complication: what do I do today?The first hours after a reaction, burn or injectable complication decide the client's outcome and whether your insurance responds, so act in the right order and admit nothing.Read the lesson
Open the interactive lesson · Every beauty, hair and aesthetics lesson · What Greymill knows about the trade
Sources
The primary sources behind this lesson, checked Oct 2026.
- Autoclenz v Belcher [2011] UKSC 41 (Staffing models and employment status)
- Uber BV v Aslam [2021] UKSC 5; Pimlico Plumbers v Smith [2018] UKSC 29 (Staffing models and employment status)
- Current Home Office code, civil-penalty table: £45,000 per worker for a first breach and £60,000 for a repeat breach within 3 years (Staffing models and employment status)
- National Minimum Wage Regulations 2015 regs 6, 9 to 13 (Pay floors and minimum wage traps for salons)
- GOV.UK worker-disputes guidance: HMRC enforces minimum wage on behalf of the Fair Work Agency; ERA 2025 s. 105(2): six-year claim period (Pay floors and minimum wage traps for salons)
- Working Time Regulations 1998 regs 15B and 16A (Pay floors and minimum wage traps for salons)
- Lock v British Gas, C-539/12 (Pay floors and minimum wage traps for salons)
- SI 2026/954 regs. 3 and 4 and Schedule (Pay floors and minimum wage traps for salons)
- Employment (Allocation of Tips) Act 2023, extent section (Pay floors and minimum wage traps for salons)
- ERA 2025 s. 14(2) to (4): consultation and review duties; revised-Code consultation published 19 August 2026 and closed 29 September 2026 (Tips, service charges and tronc)
- SI 2001/1004 Sch 3 Part 10 para 5; HMRC E24 (Tips, service charges and tronc)
- ERA 1996 s.1 (Staff contracts, covenants and client lists)
- TULRCA 1992 s.207A (Staff contracts, covenants and client lists)
- Current rates table: £12.71 for workers aged 21 and over from April 2026; 38 x £12.71 minus £400 equals £82.98 (People hard cases)
- UK GDPR Art 33 (People hard cases)
- rates and thresholds 2026 to 2027 (Worked examples in pounds)
- BRIL 5/2025 para 3 (Worked examples in pounds)
- VATA 1994 Sch. 9 Group 1 item 1(ma); VATLP19810, 1 October 2012 legislative change; VATLP19820, chair, room or space and related services (VAT: chair and room rental and who supplies the service)
- VATLP19820 (what is chair rental); VATA 1994 Sch 9 Group 1 item 1(ma) and its exclusive-use carve-out for hairdressers (VAT: chair and room rental and who supplies the service)
- VATA 1994 Sch 1 para 1; GOV.UK when to register (VAT: chair and room rental and who supplies the service)
- VATA 1994 s. 77(1), (4), (4A) and (4C) (VAT: chair and room rental and who supplies the service)
- FA 2008 Sch 41 paras 6 and 13 (VAT: chair and room rental and who supplies the service)