Start from cost, then check the market
Most salons set prices by looking at the salon down the street. That price reflects someone else's rent, pay plan, and chair time. Start from your own costs, then use the market to decide whether the price holds.
The bottom of that fraction matters. Commission, payroll tax, and card fees are paid on the price itself, so every dollar you add carries them too. That is why underpricing hurts more than it looks.
Try it with your numbers
Suggested price
$366
- Break-even (zero profit)
- $251
- Profit per chair hour at suggested
- $18
- At your price today
- -$12 a service
Round to your menu's price points, then check it against what guests in your market pay for the same service.
The balayage example
A three-hour balayage with $35 of product, a stylist on 45% commission, 10% payroll tax, $28 of overhead per chair hour, 3% card fees, and a 15% profit target:
| At this price | $225 (today) | $366 (suggested) |
|---|---|---|
| Stylist pay with payroll tax | $111 | $181 |
| Overhead (3 chair hours) | $84 | $84 |
| Product | $35 | $35 |
| Card fees | $7 | $11 |
| Salon profit per service | -$12 | $55 |
At $225, every balayage loses about $12. Break-even is about $251, and the price that earns a 15% profit is about $366.
If the market won't pay it
Sometimes the cost-based price is more than guests in your area will pay. Then the question is which lever to move. In the example above:
- Chair time: every extra 15 minutes costs about $7 of profit per service. Tighter processing time and fewer gaps are often the cheapest fix.
- Commission: each point of commission costs about $2.50 per service once payroll tax is included.
- Overhead: each extra dollar of overhead per chair hour costs $3 on a three-hour service.
- Product: each dollar of product costs a dollar of profit. Back bar drifting up quietly is a common margin leak.
Underpricing also pushes your labor cost percentage up, because commission is paid on work that earns too little.
Common questions
How do I calculate what to charge for a salon service?
Add up what the service costs you: chair time multiplied by your overhead per chair hour, plus product. Then divide by what is left of each dollar after commission (with payroll tax), card fees, and your target profit. Round to your menu and check it against your market.
What is overhead per chair hour?
Your monthly fixed costs (rent, utilities, software, insurance, front desk) divided by the chair hours you actually book in a month. It tells you what every hour in the chair costs before product and pay.
Why does commission raise my price so much?
Commission is paid on the price, so every dollar you add pays commission and payroll tax too. At 45% commission plus 10% payroll tax, almost half of each extra dollar goes to labor, which is why break-even is higher than most owners expect.
Should I just match what other salons charge?
Use the market as a check, not the starting point. Another salon's price reflects their rent, pay plan, and chair time. Start from your own costs, then decide whether the market supports it or whether a lever needs to move: chair time, commission structure, or overhead.
What is a good profit margin on a salon service?
This calculator defaults to 15% profit on each service, the same default Kite Agent uses. Adjust it to the margin your salon needs to fund growth and a cash reserve.
From Ignite CFO Group's Salon CFO Playbook and the math inside Kite Agent. General guidance, not tax or legal advice; check your own situation with your CPA.