Setting up commission for services incentivizes your employees and service providers to take more appointments if they bring in more revenue. In the Payroll Configuration screen, you can set up one of the following commission types:
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Tiered Commission by Revenue: Pay commissions as a fixed percentage or amount based on how much money the employee brought in.
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Commission by Service: Pay a fixed commission based on what services the employee sold.
Note
If any employee is set up for Tiered Commission by Revenue, only the settings on that tab will apply to that person.
Tip
For hourly employees, toggle on Only Pay Hourly Rate or Commission (Whichever is Larger) to pay only the commission amount if the commission earned during a pay period is more than the total hourly pay, and if the total hourly pay during a pay period is more than the commission earned, then only the total hourly pay will be given.
Commissions are paid based on when a booking is performed, not when a customer pays for the service. For example, consider this business that has a bi-monthly pay schedule, and the current pay period is January 1-15. A customer books an appointment for January 20 but pays for it right away on January 3. This means that the service provider will receive their commission at the end of the next pay period (January 16-31) because the appointment will occur after the immediate pay period.
The exception is if a customer pays a deposit via an invoice for an appointment that will take place in the next payroll period, then the commission will be paid in the immediate payroll period. So for that same business, if the same customer booked that same appointment and paid for it with an invoice, the service provider would receive their commission in the same pay period.
Important
Do not set up commissions for employees with merchant accounts. If an employee has their own merchant account, the full amount of service or class sales will be deposited into their bank account. Setting up commissions for these employees will result in payment into their merchant account as well as receiving commissions.
Prerequisites: This feature is available for all Vagaro businesses on the web, tablet, and Pay Desk. In the US, Vagaro Payroll is recommended if you want to send your employees direct deposits and withhold their income taxes.
This option allows you to customize multiple percentages or amounts based on how much an employee charges for a service.
To set up tiered commission by revenue:
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Go to → .
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If you subscribe to Vagaro Payroll, ensure your employees have been added to the Payroll tab.
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Scroll to the bottom of the screen, and then select the Services tab.
The Tiered Commission by Revenue tab will be the default selection.
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Add additional tiers by selecting +Add, and then enter the 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 selecting the displayed trash icon.
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Select Save.
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 amount 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 and perform specific services, such as mobile services.
For example, you can set tiered commission by revenue for all your employees, and you can pay a higher commission for a specific service that you offer by entering it in the Commission by Service tab for each employee.
To set up commission by service:
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On the Payroll Configuration screen, select the Commission By Service tab. 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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Enter the commission for the employee.
For Miranda C, she will get a $10 commission for Makeup-Application. You can also set the commission to be a percentage of the service cost.
Note
For mobile services, commissions must be entered as a dollar amount, not a percentage.
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Select Save.
Use Save and Run Payroll ONLY WHEN 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, set the commission percentage to $0 for that employee.
Comments
2 comments
Is there a way to pay employees a commission of the membership price per service? For example our membership is $55 but the regular price is $65. On the payroll report it's showing as a $65 discount so they aren't getting paid anything, but it should only be a $10 discount. Is there a way to configure payroll so they get paid commission on the membership price?
Hi, Grace. In the Payroll Configuration screen, there is a toggle to "Deduct Membership Discount from Commission." If it is enabled and the membership offers a partial discount, then the providers should get a commission based on the paid amount. If the providers get nothing at all and that toggle is on, then the membership may be covering the full cost of the services, so there is no commission from the service.
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