Setting up commissions for classes incentivizes your employees and service providers to teach more classes if they bring in more revenue, if more customers pay for classes, or for how many customers attend their classes. 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 Attendees: Pay commissions based on how many customers attended a class and whether each customer Checked In and/or Paid for the class. This commission type can be stacked with commission by revenue.
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Commission by Class: Pay a commission each time the employee teaches a class. This commission will override both commissions by attendees and by revenue.
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 class.
Tiered Commission by Revenue is the default; class-specific commissions will override the revenue commission.
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 Classes tab.
The Tiered Commission by Revenue tab will be the default selection.
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Add additional tiers by selecting +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 selecting the displayed trash icon.
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Select 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. Only commission amounts can be assigned on this tab; percentages are not allowed.
To set up tiered commission by class attendees?
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In the Payroll Configuration screen, select the Classes tab, then select 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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Select 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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Select 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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Select 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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Select 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 selecting the trash icon to delete it.
On 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.
To set up commission by class:
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Select 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. Select 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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Select Save to save these payroll settings.
Use Save and Run Payroll ONLY WHEN 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.
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