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Why Use Vagaro for Payroll (next)
Related Article: State Overtime Laws
On the Payroll Configuration page, you can set a Pay Frequency and pay employees weekly, every other week, monthly, or twice per month. We offer many ways to customize your commission, from paying per service or product to tiered percentages or dollar amounts.
Gusto integration is only available to US customers.
To sign up for your 3-month free trial of Gusto, click here.
Note
To close out the payroll and add it to the Payroll History Report, you have to mark it as paid. Click here for more information. Also, note that the payroll is based on the Appointment Date, not the date that a transaction is Checked Out or Completed.
To set up payroll, follow the steps below.
Navigating to Payroll Configuration on the Pay Desk/iPad
Payroll configuration is only available on the Web, Pay Desk, and iPad versions of Vagaro. The screenshots below display the Web screens, which are similar.
To navigate to Payroll Configuration, tap Reports, then tap Payroll Configuration.
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Click Reports.
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Click Payroll Configuration under Employees.
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Select your Payroll Frequency (how often you pay your employees.)
You can pay employees Weekly, Every Other Week, Monthly, or Twice Per Month (on the 15th of each month and the last day of the month).
Note
If you use the Gusto integration, your Vagaro Payroll Frequency must match the Pay Schedule settings in Gusto. Click here for more information.
Set a Payroll Closing Day.
The set day of the week will determine when your payroll closes every week. For example, if Payroll Closing Day is set to Mon, your payroll will close every Monday.
Below the Payroll Frequency option, you can see how Overtime pay is calculated based on your state's laws.
See State Overtime Laws for more information.
For users outside of the United States, you will be asked to enter the hours under Overtime begins after to set when overtime hours begin for your employees. Then enter the multiplier below Overtime hourly multiplier. This multiplies the employee's hourly rate by the number you've entered. Remember, the multiplier applies only to daily pay.
Set your Payroll Closing Day and Payroll Ending Day.
Your Payroll Closing Day will be the day of the week your payroll ends, and the Payroll Ending Day is the last date of the current Payroll period. These settings determine the hours worked for payroll purposes.
For example, if your first payroll ending date is Friday, the 14th, the payroll period for hours worked will be the 1st-14th. The next payroll period will be the 15th-28th, ending Friday the 28th. Payroll will continue every other Friday.
Below the Payroll Frequency option, you can see how Overtime pay is calculated based on your state's laws.
See State Overtime Laws for more information.
For users outside of the United States, you will be asked to enter the hours under Overtime begins after to set when overtime hours begin for your employees. Then enter the multiplier below Overtime hourly multiplier. This multiplies the employee's hourly rate by the number you've entered. Remember, the multiplier applies only to daily pay.
If you selected the Twice Per Month option, payroll will always end on the 15th and Last Day of each month.
With Twice Per Month selected, you will not be able to run payroll for hourly pay rates. We are not responsible for determining your employee's overtime hours based on the hours worked. This is because overtime occurs after hours worked in a day or total hours worked in a week. Not all calendar months have the same number of weeks or days in them; therefore, we cannot calculate hours and overtime hours worked for these odd months.
If you selected Monthly, your payroll will always end on the final day of the month.
With the Monthly payroll frequency selected, you will not be able to run payroll for hourly pay rates. We are not responsible for determining your employee's overtime hours based on the hours worked. This is because overtime occurs after hours worked in a day or total hours worked in a week. Not all calendar months have the same number of weeks or days in them; therefore, we cannot calculate hours and overtime hours worked for these odd months.
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Toggle Include Tips on (green) after considering the following:
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Select Include Tips if you want to include all tips in the payroll, including cash and credit card tips.
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Select Include Tips if you allow employees to take cash tips but pay them for credit card tips at payroll. In this case, do not enter cash tips at the checkout screen.
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Do not select Include Tips if your employees are taking cash tips on the day that the service is completed.
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Select Deduct Service/Class Cost if you want 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, around $5 dollars to complete the service (the cost to the business). If you subtract the cost to business, the net for the service is $70. The system will see this and only give service providers a commission on the $70 net gain instead of the $75 sales price.
Note
If the business cost exceeds the commission amount, the commission for the service will be $0.
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Select Deduct Product Cost 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 software will see this and only give service providers a commission on the $18 net gain instead of the $20 sales price.
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Select Deduct Discounts to subtract the sales discount from the service price when calculating commission.
Here's an example that highlights this feature. Let's say you are a business owner offering a 50 percent discount on haircuts for a weekend. If this option is selected, the employee will receive a commission on the discounted price, which is $15. If this option is not selected on a $30 haircut, the service provider will receive the full $30 commission.
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Select Subtract Membership Discounts from Commission to deduct a membership discount when calculating the commission for each employee.
For example, if you have a product that is $50, but the membership discount is 25%, knocking the price down to $37.50, the employee will receive a commission based on the $37.50. If this option is turned off, the employee will make a commission on the initial $50 price.
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Toggle Only Pay Hourly Rate or Commission On (green) to pay an employee with either commission or hourly pay.
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Select Apply to all hourly pay rates.
If the commission earned during a pay period exceeds the total hourly pay, the employee will only be paid in commission. If the total hourly pay during a pay periods exceeds the commission earned, then the employee will only be paid their hourly pay.
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Select Apply to specific pay rates, then select the roles that you want this setting to apply to.
If the total commission earned during a pay period exceeds the total hourly pay for the selected roles, the employee will not receive hourly pay for those selected roles. If the total hourly pay for the selected roles exceeds the total commission earned, then the employee will only be paid their hourly pay with no commission.
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This option allows you to customize multiple percentages or amounts based on how much an employee charges for a service.
Tiered Commission by Revenue is the default; service-specific commissions will override the revenue commission.
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Click the Services tab on the Payroll Configuration screen.
The Tiered Commission by Revenue tab will be the default selection.
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Add additional tiers by clicking + Add. Provide a top range for each tier and enter commission percentages per Employee. (You can also enter flat commission amounts.)
For example, if you set a Tier 1 commission for sales between $0.00 and $99 and a Tier 2 commission for sales between $100 and $499, Anna MacKenzie, who sells $300 in Services within the Payroll period, would get the Tier 2 commission of 40% on all services performed within the pay period. If she sold $600, Anna would get the Tier 3 commission of 45% on all services performed within the pay period. You can add as many tiers as you need, giving you more control over how you pay your employees. This can be set up for Services, Products, or Classes.
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When you're filling a commission field, you have the option to copy left/right and up/down with the same rate or amount to other tiers or employees.
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You can remove a tier entirely by hovering over it, then clicking the displayed trash icon.
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Click Save to save these payroll settings.
ONLY use Save and Run Payroll if you're ready to run the payroll at the same time you save the settings.
This option allows you to set a dollar or percentage commission for each service your employees perform. This gives your business more control over how much you pay your employees, including a way to offer an incentive for employees to upsell specific services.
Tiered Commission by Revenue is the default, and any service-specific commissions will override the revenue commission.
For example, you can set Tiered Commission by Revenue for all your employees, and you can have a specific higher commission for one specific service that you offer; you can do that by entering it in the Commission by Service tab for each employee.
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Click the Services tab on the Payroll Configuration screen, then select Commission By Service.
Your list of Services will populate, so you can enter commission details for each one.
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Select the Service Category to edit commissions.
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Now set the commission for an employee.
For Miranda C, we've entered a $10 commission for Makeup-Application. You can also set the commission to be a percentage of the service cost
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Click Save to save these payroll settings.
ONLY use Save and Run Payroll if you're ready to run the payroll at the same time you save the settings.
Note
If you set an employee's Tiered Commission by Service commission to $0.00, then they will automatically receive the percentage commission for services. If you would like to avoid this, zero out the commission percentage for that employee.
This option allows you to customize multiple percentages or amounts based on how much an employee charges for a class.
Tiered Commission by Revenue is the default; class-specific commissions will override the revenue commission.
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Click the Classes tab on the Payroll Configuration screen.
The Tiered Commission by Revenue tab will be the default selection.
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Add additional tiers by clicking +Add. Provide a top range for each tier and enter commission percentages per Employee. (You can also enter flat commission amounts.)
For example, if you set a Tier 1 commission for sales between $0.00 and $99 and a Tier 2 commission for sales between $100 and $499, Anna MacKenzie, who sells $300 in Classes, would get the Tier 2 commission of 40% within the Payroll period. If she sold $600, Anna would get the Tier 3 commission of 45% within the Payroll period. You can add as many tiers as you need, giving you more control over how you pay your employees. This can be set up for Services, Products, or Classes.
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When you're filling in a box on one tier, you have the option to fill left/right and up/down with the same rate or amount to other tiers or employees.
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You can remove a tier entirely by hovering over it, then clicking the displayed trash icon.
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Click Save to save these payroll settings.
ONLY use Save and Run Payroll if you're ready to run the payroll at the same time you save the settings.
This option allows you to set a commission structure based on the number of attendees for an appointment or class. You may only assign commission amounts on this tab; percentages are not allowed.
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Click the Classes tab on the Payroll Configuration screen, then click Tiered Commission by Attendees.
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Select an option for the types of attendees you'll pay commissions on:
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Click Check-In or Paid to give a commission to an employee if an attendee has checked in (marked as Show) or has paid for the service or class.
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Click Paid to give commission to an employee only if an attendee is marked as Paid, meaning they have been checked out and paid for the service or class.
If you select Paid and the attendee is marked as "Check-In" but has not yet paid for the class, the employee will not receive a commission.
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Click Check-In to give commission to an employee if the attendee checked into the class or has been marked as Show.
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Set the commission for an employee. Let's look at Donna J in the example below. We've entered $5 in the box under No Show. This means Donna will receive 5 dollars if a customer does not attend an appointment or class.
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In the next column, we've entered $15 in the box under 1-4 Attendees. This means Donna will earn 15 dollars in commission if at least one client makes it to the appointment or class.
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The third column shows the commission for between 5 and 9 attendees.
In this case, Donna will receive 25 dollars in commission if 5 to 9 customers participate in the class, but she will receive 35 dollars in commission once the class capacity reaches 10.
She will receive 60 dollars in commission once the attendee list reaches 20, as we have assigned the 60-dollar commission to 20 or more attendees.
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Click Save to save these payroll settings.
ONLY use Save and Run Payroll if you're ready to run the payroll at the same time you save the settings.
As with the other entry fields for commissions, you can fill left/right or up/down and switch between amounts and percentages for each employee and rate column. You can remove rate tiers by hovering over one and clicking the trash icon to delete it.
When you select the Commission by Class tab, you can set specific commission amounts for different classes and customize the amounts for each employee. Each instructor’s commission can be customized by an amount or percentage of the class revenue. You may only assign commission amounts on this tab; percentages are not allowed.
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Click the Classes tab and then Commission by Class.
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Using the drop-down menu, you can select all or specific employees to display on the screen. Click Go to populate the table with your selections.
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Select a Class category on the left side of the screen, then enter a commission amount for each employee for each class they teach.
You have the same fill left/right or up/down options as with other commission entry pages.
In the example above, Anna receives $20 for each Custom Spin class she teaches, Bijou receives $25, and Donna makes $10 for each class she teaches.
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Click Save to save these payroll settings.
ONLY use Save and Run Payroll if you're ready to run the payroll at the same time you save the settings.
Note
If Commission by Class, Service, or Product is set to any value greater than $0.00, it will override the Tiered Commission by Revenue and Tiered Commission by Attendee.
Note
Tiered Commission by Revenue and Tiered Commission by Attendee will automatically combine in the payroll. If you do not wish to merge these commissions, set the value of one of the commission types to $0.00. This will result in the employee being paid for only one commission type.
This option allows you to customize multiple percentages or amounts based on how much an employee charges for a product.
Tiered Commission by Revenue is the default; product-specific commissions will override the revenue commission.
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Click the Products tab on the Payroll Configuration screen.
The Tiered Commission by Revenue tab will be the default selection.
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Add additional tiers by clicking +Add. Provide a top range for each tier and enter commission percentages per Employee. (You can also enter flat commission amounts.)
For example, if you set a Tier 1 commission for sales between $0.00 and $99 and a Tier 2 commission for sales between $100 and $499, an employee, who sells $300 in Products, would get the Tier 2 commission of 40% within the Payroll period. If she sold $600, they would get the Tier 3 commission of 45% within the Payroll period. You can add as many tiers as you need, giving you more control over how you pay your employees. This can be set up for Services, Products, or Classes.
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When you're filling in a box on one tier, you have the option to fill left/right and up/down with the same rate or amount to other tiers or employees.
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You can remove a tier entirely by hovering over it, then clicking the displayed trash icon.
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Click Save to save these payroll settings.
ONLY use Save and Run Payroll if you're ready to run the payroll at the same time you save the settings.
This option allows you to set a specific commission for each product your employees sell. You can select a dollar or percentage amount. This gives you more specific control over how much you pay your employees when they sell retail products.
Tiered Commission by Revenue is the default, and any product-specific commissions will override the revenue commission.
For example, you can set Tiered Commission by Revenue for all of your employees and have a specific higher commission for one product. Do that by entering it in the Commission by Product tab for each employee.
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Click the Products tab on the Payroll Configuration screen, then select Commission by Product.
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Select a Brand to edit.
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For each product, enter an amount or percentage for the commission you will pay when an employee sells that product.
For example, you could set an employee to get a 10% commission for every Redken All Soft Shampoo sold, while another employee gets $3 for her commission.
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Manually enter commissions for each product or copy commission rates across all employees and/or products within that brand.
With role-based hourly pay, employers can assign pay rates to job roles set by the business. This allows for more flexibility in setting wages based on the responsibilities required for each role.
When employees clock in, they can select a role specific to their job duties and responsibilities. After clocking out, the employee's pay will be automatically calculated based on the hourly rate assigned to the employee for that role. Role-based hourly pay can also be helpful for managing labor costs and budgeting, as employers can adjust pay rates for different roles and employees as needed to control expenses. Additionally, it can provide career progression and incentives for employees to develop new skills and take on additional responsibilities to earn higher pay rates.
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Click the Hourly Pay tab.
Existing pay rates set before Role-Based Hourly Pay are still saved. They are now set as the role: Hourly Pay Rate. You can leave the current name or modify it as per your preference.
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Click + Add to create a new role.
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Enter a Role Name and Hourly Pay Rates for each applicable employee.
If you assign an employee a pay rate of $0.00, they won't be able to clock in for that role. Therefore, please ensure that employees do not have a pay rate assigned for a role they are not qualified for.
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Click Save.
Your new Role-Based Hourly Rates are now configured. Your employees can now clock in for a specific role. To learn more about clocking in and out and Payroll reporting, please see the following articles:
Comments
2 comments
Our commissions run up to 40% which is $20,000.00. It wont let me add any tier above $9,999.00 Is there a way to add larger amounts?
Wendy, I put in a support ticket for this issue. The system does limit the top to $9999, and I don't know a way around it. Hoping support can help you.
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