The Payroll Feature allows you to configure and keep track of employee pay, tips, and commission. Additionally, you can set a Pay Frequency, paying employees weekly, every other week, monthly, or twice per month, and run detailed reports, displaying a breakdown of the total hourly pay as well as the commission structure for each employee. We offer many ways to customize your commission, from paying per service or product to tiered percentages or dollar amounts. You also have the ability to run payroll using our Integration with Gusto, which allows you to pay your Employees using Direct Deposit, set up tax withholding, and more.
To sign up for your 3-month free trial of Gusto click here.
To set up the payroll, follow the steps below.
Jump to:
- Setting Up Payroll
- Tiered Commission Per Employee
- Tiered Commission by Class Attendees
- Commission by Class
- Commission by Service
- Commission by Product
- Hourly Pay
Related Article: State Overtime Laws
Setting up Payroll
- Click Reports at the top of the screen.
- Click Payroll Configuration on the left side of the screen under Employees.
- 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 are using the Gusto integration, your Vagaro Payroll Frequency must match the Pay Schedule settings in Gusto. Click here for more information.- If you selected Weekly, set a Payroll Closing Date.
- If you selected Every Other Week, you'll be able to 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. - If you selected the Twice Per Month option, payroll will always end on the 15th and Last Day of each month.
Note: With Twice Per Month 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. - If you selected the Monthly option, your payroll will always end on the final day of the month.
Note: 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.
- If you selected Weekly, set a Payroll Closing Date.
- 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.
- Toggle Include Tips on (green) after considering the following:
- Select Include Tips if you want to include all tips, including, cash, and credit card tips, in the payroll.
- 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.
- Do not select Include Tips if your employees are taking cash tips on the day that the service is completed.
- 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 about $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. - 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. - 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 and you're 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 in this instance. If this option is not selected on a $30 haircut, the service provider will receive the full $30 commission. - 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 make $37.50 in commission. If this option is turned off, the employee will make a commission on the initial $50 price.
Tiered Commission Per Employee
This option allows you to customize multiple percentages or amounts based on how much an employee charges for a service, class, or product.
Tiered Commission by Revenue is the default, and any product or service-specific commissions will override the revenue commission.
- Click the Services tab on the Payroll Configuration screen.
The Tiered Commission by Revenue tab will be the default selection. - 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 and $99 and a Tier 2 commission for sales between $100 and $499, Anna MacKenzie who sells $300 in Services would get the Tier 2 commission of 40%. If she sold $600, Anna would get the Tier 3 commission of 45%. 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.
- 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.
- You can remove a tier entirely, by hovering over it and then clicking the trash icon that displays.
- 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.
- 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.
Tiered Commission by Class Attendees
This option allows you to set a commission structure based on the number of attendees that show up to an appointment or class. You may only assign commission amounts on this tab; percentages are not allowed.
- Click the Classes tab on the Payroll Configuration screen, and then Tiered Commission by Attendees.
- Select an option for the types of attendees you'll pay commissions on:
- Click Check-In or Paid to give commission to an employee if an attendee has checked in (marked as Show) or has paid for the service or class.
- 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. - Click Check-In to give commission to an employee if the attendee checked into the class or has been marked as Show.
- Click Check-In or Paid to give commission to an employee if an attendee has checked in (marked as Show) or has paid for the service or class.
- 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 that Donna will receive 5 dollars if a customer does not show up to an appointment or class.
- 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.
- The third column shows 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.
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.
Commission by Class
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.
- Click the Classes tab and then Commission by Class.
- Using the drop-down menu, you can select all or specific employees to display on the screen.
- 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, Anna receives $20 for each Custom Spin class she teaches while Bijou receives $25 and Donna makes $10 for each class she teaches.
Commission by Service
This option allows you to set a dollar or percentage commission for each service performed by your employees. 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.
- Click the Services tab on the Payroll Configuration screen and then select Commission By Service.
Your list of Services will populate, so you can enter commission details for each one. - Select the Service Category to edit commissions.
- 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
Commission by Product
This option allows you to set a specific commission for each product sold by your employees. 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.
- Click the Products Tab on the Payroll Configuration screen. Then select Commission by Product.
- Select a Brand to edit.
- 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 Alisha to get a 10% commission for every Redken All Soft Shampoo sold, while Tanya gets $3 for her commission. - Manually enter commissions for each product or copy commission rates across all employees and/or products within that brand.
Hourly Pay
This option allows you to enter in an Hourly Pay Rate for each employee and assign each employee an Employee Card ID. The Employee ID Card is used for the Time Clock function of Vagaro. For more information on clocking employees in and out, click here.
- Enter an amount for the hourly pay rate for each employee.
- Click the Employee Card ID box on the employee row and then scan the card using your barcode scanner.
Note: Employee Time Cards only work on the Web version of Vagaro at this time, and are only compatible with the Barcode Scanner or the Computer Credit Card Reader. The timecards do not work with the EMV Reader. - Click Save to save the payroll settings you've creates.
Click Save and Run Payroll if you are ready to run payroll.
Comments
14 comments
Is there a way to run a report for a year in payroll instead of just your payroll period. (for year end stuff)
Unfortunately there is not a way to run a report for the year at this time, but it is a good request. I will mention it at our next review meeting.
Is there a way to email payroll reports?
Great idea--any updates to this as of 2014? Sales tax too would be awesome:)
I'd also like to know if this report can now be run for more than an individual payroll period.
I could really use a year end report right now.
Is there any way to set up payroll configuration for each service provider (some are hourly basis with tip included and some are hourly basis only) ?
Hello Jun,
The Payroll Configuration setup allows for you to input the hourly wages, commission percentages, and if the tip is being included in their paycheck. The payroll report will generate and itemize the pay due based off of the numbers you set against the sales and hours worked for each employee. If you need a greater explanation, please give us a call at 800-919-0157 opt. 2 for support. Your post is something I would typically have you call technical support for.
When discounts are given there seem to be only two options: 1) employee gets full discount out of commission or 2) business gets full discount out of 'proft'. Is there no way to split it between employee/business 50/50?
Hi Nicholas,
You are correct that there is currently not a way to split a discount 50/50. I am sharing this feedback with my Team, to see if this is a feature we can offer in the future. You can also request this feature by going to feedback.vagaro.com as well.
How can we set up this time clock function for an employee not providing services. I see no option for tracking pay in my current settings.
Hi Sarah,
You need to enter in an Hourly Pay Rate and Employee ID for that Employee. Once that information has been entered, they will be able to use the Time Clock function, just like an employee who provides services. If you have any further questions about this please reach out to our Support Team at sales.vagaro.com/contact
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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