What is the labor cost for a hair salon?

Our business plan for a hair salon will help you build a profitable project

The labor costs in a hair salon cover wages, commissions, tips, and other payroll expenses. Properly managing these will help ensure your salon is profitable while providing fair compensation for your team.

We will break down the key elements involved in calculating labor costs, such as employee types, wages, working hours, and commissions. By understanding these details, you can make smart financial decisions for your new business.

Labor costs will typically represent a significant percentage of your salon’s operating expenses. Keeping track of these costs is essential to maintaining profitability.

Below, we answer common questions regarding labor costs for a hair salon business. Use this information to help structure your business model effectively.

How many hairstylists, assistants, and receptionists are employed in a salon?

The number of staff depends on the size and client volume of the salon. A typical salon will employ 4-8 hairstylists, 2-3 assistants, and one full-time receptionist. Smaller salons may have fewer staff members, while larger salons may employ more.

It is important to consider the volume of clients and the services offered when determining staffing levels. Too few employees can lead to long wait times, while too many can increase overhead costs.

To determine optimal staffing, assess your target client volume and the services you will provide.

What are the average hourly wages or salaries for each role?

Here is a breakdown of the average hourly wages for hairstylists, assistants, and receptionists:

Role	Hourly Wage (THB)	Hourly Wage (USD)
Hairstylists	250–800 THB	$7–$22
Assistants	260–300 THB	$7–$8
Receptionists	280–300 THB	$8–$9

How many total working hours per week do employees typically log?

Hairstylists and assistants generally work 40–45 hours per week, which may include overtime during busy periods. Receptionists often work similar hours but with peak demand on weekends and evenings.

Understanding work hours helps with scheduling and ensures that labor costs remain within your planned budget.

Proper time tracking ensures that your team isn't overworked while still meeting client demands.

What percentage of total sales is allocated to labor costs in similar-sized salons?

Labor costs typically make up 35–45% of a salon’s revenue. This is consistent with global industry benchmarks.

Knowing this percentage will help you project your operating costs more accurately and determine pricing strategies that can cover labor expenses while remaining competitive.

Maintaining labor costs within this range is key to running a profitable business.

Are employee wages fixed, commission-based, or a combination of both?

Many salons use a combination of base hourly wages and commission-based pay. Stylists typically earn a base salary plus commission (10–20%) on services and product sales.

Assistants and receptionists generally have hourly wages without commissions, although receptionists may receive a small commission for upselling products.

Offering commissions incentivizes staff to upsell products and services, benefiting both employees and the business.

What are the additional payroll expenses such as taxes, insurance, and benefits?

Payroll expenses include social security taxes, health insurance, and other benefits. These expenses can add 5–10% to base wages.

Accounting for these expenses is essential in understanding the full cost of labor in your salon.

Additional benefits such as vacation days and sick leave should also be factored into your payroll budget.

How does the salon handle training time, vacation, and sick leave?

Training time is generally paid as normal working hours. Vacation days (10–15 per year) and sick leave are also paid according to local labor laws.

It’s important to allocate funds for these paid days off to ensure your salon remains financially sound while offering fair employee benefits.

By offering paid leave, you ensure your staff is well-trained and can take necessary time off without financial hardship.

What is the ratio of productive hours to total paid hours for stylists and assistants?

For stylists and assistants, approximately 70–80% of paid hours are spent on client services, while the remaining time is used for cleaning, prep, and downtime.

Maximizing productive hours ensures that you’re getting the most out of your staff while minimizing unnecessary costs.

Tracking productive hours can also help improve scheduling efficiency.

What are the average tips received per employee, and how are they distributed or taxed?

Stylists typically earn 1,500–3,000 THB in tips per week, while assistants receive 500–1,200 THB, and receptionists earn less than 400 THB.

Tips can be either kept individually or pooled and divided equally. All tips are taxable under local law.

Proper distribution and tax compliance are important to maintain transparency with staff and local authorities.

How much administrative or managerial time is required weekly, and what is its cost to the business?

Small salons typically require 6–12 hours per week of administrative work, which may be handled by the owner or a part-time manager at 600–1,000 THB/hour.

Factor in these administrative costs when setting your budget to ensure that management time does not eat into your profits.

Effective management is crucial for the day-to-day operations of the salon.

How does labor cost fluctuate by season, day of the week, or service type in this salon?

Labor demand can increase by 10–20% during busy holiday seasons, such as Lunar New Year or Christmas. Conversely, it may decrease by 10–15% during low seasons.

Weekends generally require more staff, while weekdays may only require part-time help.

Understanding these fluctuations helps with adjusting staff schedules and managing payroll costs.

What percentage of total operating costs does labor represent, and how does that compare to the industry benchmark?

Labor typically accounts for 45–52% of total operating costs in a hair salon. This aligns with global benchmarks for similar-sized operations.

It’s important to regularly review labor costs as a percentage of total expenses to ensure that your business remains profitable.

Managing labor costs effectively is key to long-term success.

Conclusion

This article is for informational purposes only and should not be considered financial advice. Readers are encouraged to consult with a qualified professional before making any investment decisions. We accept no liability for any actions taken based on the information provided.

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