How to Set Up and Run Your Payroll in Vagaro
Stay on top of your payroll as well as your commission structure in Vagaro. The Payroll Feature allows you to configure and keep track of employee pay, tips, and commission. Additionally, you can set your payroll to pay your employees weekly, bi-weekly, monthly, or bi-monthly. You also can run detailed reports, displaying a breakdown of cumulative hourly pay as well as commissions for each employee.
Watch this video or follow the steps below to set up and configure payroll in Vagaro.
1. Click Reports.
2. Click Payroll Configuration.
3. Here you can set up all of the payroll options specific to your business.
Payroll Frequency allows you to set up or change how often your payroll closes or when you pay your employees. Choose Weekly, Monthly, Bi-Weekly (every 2 weeks) or Bi-Monthly (twice in a month).
Overtime begins after allows you to set when overtime hours begin for your employees.
Overtime hourly multiplier enables you to multiply an employees hourly rate by the number set. Keep in mind that the multiplier applies to daily pay.
You also have an option to set your Payroll Closing Day and Payroll Ending Day when setting your Bi-Weekly hours. For example, if your first payroll ending date is Friday, the 14th:
-The Payroll period will be the 1st-14th.
-The next Payroll period will be the 15th-28th, ending Friday 28th.
-Payroll will continue every other Friday.
4. Please review the information below.
- All tips, including, cash, and credit card tips, are included in payroll if you toggle to Include Tips.
- Toggle to Include Tips if you allow customers to take cash tips, but pay them for credit card tips at payroll. Do not enter cash tips at the checkout screen.
-If your employees are taking cash tips on the day that the service is completed, do not toggle to Include Tips.
Deduct Business Services/Class Cost tells payroll to deduct the service cost from the sales price of the service. For example, let's look at a cut and color service. The service is $75, and it costs on average about $5 dollars worth of color to complete the service. If you subtract the cost to business, the net for the service will be $70. The Vagaro payroll screen will see this and only give service providers commission on the $70 net gain instead of the $75 sales price.
Deduct Business Product Cost tells payroll to deduct the product cost from the sales price. For example, let's say you have a product that costs $2 and the sales price is $20. If you subtract the cost to business, the net for the product will be $18. The Vagaro payroll screen will see this and only give service providers commission on the $18 net gain instead of the $20 sales price.
Subtract Discount From Commission tells payroll to subtract the sales discount from the service price when calculating commission. For example, let's say you are a business owner running a special stating that haircuts are half off for a weekend. If this option is not selected on a $30 haircut, the service provider will receive the full $30 commission. When this option is selected, the service provider will receive the commission on the discounted price, which is $15 in this instance.
Commission Structure Per Employee
5. You can find the Commission Structure Per Employee below the Payroll Configuration. Here, you can set up the Hourly Rate ($), Threshold, and Commission Percentage for Services, Products, and Classes for employees.
Threshold and Commission Percentage
The Commission threshold is the limit that tells payroll to stop paying one commission and start paying another. Let's take this for example. An employee is making 45% on all sales, with a threshold set at $1000. Once the employee reaches $1000 in sales, the system will recognize it needs to increase the commission percentage to 50%. Thus, the employee will make 50% commission on all sales for that pay period. The threshold can be set for Service Sales, Product Sales, and Class Sales.
6. Once you have set up all your options, click on Save. If you are ready to run payroll click on Save and Run Payroll.