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Fair Commission Rates

Hi, I have just opened my very first, very own day spa! Before opening my own place, I worked at a couple salons paying booth rent, so I am not very familiar with commision rates. During my training 4 years ago, I was told that an average commission was 60-40 with the massage therapist getting the 60% Now-a-days it seems like these new establishments and franchises are employing therapist for less than 15% per massage. As an active massage therapist, however, I find these rates to be ofensive and simply just too low! I have a couple girls that would like to work for commission rather than booth rent and find myself unawrae of what commission to set. Clearly, as a business owner I would rather make the higher percentage, but not if its unethical.

Replies to This Discussion

Permalink Reply by Eric Wilson on October 15, 2009 at 12:12pm

What I have done is look at the therapist like a new employee that I start them at a set rate and at thier 6 month review I boost thier rate of income at the 1 year point I boost it again.
My thought process is that this a way to make sure the therapist is a great fit for my establishment.
my rates are $85.00 per hour for relaxation therapist get 25/30/35
I provide them with everything except thier table and oils/lotions I used to provide these things and found it to be a pain because every therapist likes something different I prefer oil others prefer lotion
The reason I take so much for the business is the therapist doesnt have to do anything except show up on time and do a great service. I am handing them work they dont have to worry about advertising, build/office up keep, scheduling
nothing to do with running a business just being a therapist. I also demand that they are in office 20 min prior to client arrival period or I dock that hour $10.00 that way they are prompt. when in a service industry the people paying don't want to wait and should not have to.
I hope this helps

Respectfully
Eric

Permalink Reply by rudy m smith on October 15, 2009 at 12:14pm

I like your thinking!
b4 you establish any structured commision rate or salary you have to ad in ALL of your expenses from rent/heat/cooling/power/advertizing/your salary and your benefits/upkeep and maintenance/taxes/insurance/ laundry/ oils and lotions/ essential oils/ oh my gosh the list goes on and on. Try to think of everything plus some.
Once you have these fairly predictable expenses itemized you can then see what's left in the pot and create a number of pay out options including a year end profit sharing for therapists working more than X number of hours / week who stay on at least a year. This year end profit sharing will help minimize turnover!!
Be creative but DON'T cut yourself short. You will be taking on all of the expenses and risks so you are entitled to a much greater profit margin! Go girl and remember to save a lot for rainy/slow days/months.

Permalink Reply by Mike Hinkle on October 19, 2009 at 11:05am

We charged $40 a massage. They made $25 and I made $15.

Permalink Reply by Monica Marsh on November 15, 2009 at 10:39am

I would like to thank you very much for your responses! I appreciate you guys taking the time to help out a rookie!

Permalink Reply by Laura Allen on November 15, 2009 at 11:06am

We have a wide variety of massage and spa services in my establishment. The five full-time therapists who have been with me the longest receive 70% and I keep 30%. The last one I hired, I hired at 60% and was upfront with her that she wasn't getting as much as the others because over the years my expenses have increased, but I am not willing to lower the percentages of my long-time loyal therapists. I supply everything except their massage creams and oils.

I also have a couple of specialty therapists (Rolfer, MLD, and an acupuncturist) who come from over an hour away to work at my place, and I only take 20% from them...it is worth it to me to be able to offer these services to my clients.

The chiropractor in my office gets 60%. He also sells nutritional supplements that I do not take any percentage of. I do that because his presence there allows me to bill insurance for massage, and he doesn't get anything out of that.

Needless to say, I don't have any staff turnover:)

Permalink Reply by Jorge Arnaldo Pabón Acevedo on November 15, 2009 at 1:46pm

Wow I'm in shock!
I read every details and I notice in the States the massage is Better.
Here in Puerto Rico some Spas with Great Names just pay $9 per hour
to the Massage Therapist.
I wish they can think like yours do.

Permalink Reply by Steve Ibach on December 3, 2009 at 8:46am

I pay a flat rate per treatment regardless of what we charge. The rate varies per treatment but averages about $30 per hour plus gratuity. We provide everything for the therapist and do not expect them to do anything additional (like wash, etc.)

I like the flat rate because I can focus on marketing without worrying about how the therapist will react if have a 50% coupon, etc.

Permalink Reply by Relax & Rejuvenate on March 12, 2010 at 10:52am

I am with you for a variety of reasons.

1) Simplicity. Do a massage, you know what you make. No complicated math. You are paid for your time.
2) Discounts and promotions are my decision, not the therapists.
3) % does not make any sense. Pay in a commission environment = Volume * Average Rate * % commission. How can anyone judge one variable without fully knowing the other 2? We have had potential technicians walk away because our % is "not fair", even though we pay more per service than they were currently getting. Sorry if it is not fair to pay you more.

As a rule of thumb -- whatever your compensation scheme -- total therapist compensation should be 45% or less to make the investment in an establishment and all the associated expenses and liabilities pay off.

Steve Ibach said:

I pay a flat rate per treatment regardless of what we charge. The rate varies per treatment but averages about $30 per hour plus gratuity. We provide everything for the therapist and do not expect them to do anything additional (like wash, etc.)

I like the flat rate because I can focus on marketing without worrying about how the therapist will react if have a 50% coupon, etc.

Permalink Reply by Jean Ann Scholefield on July 11, 2010 at 6:33pm

Thank you Monica for asking my question for me! thank you everyone who responded with the answers i also need!