Setting up commissions for your products incentivizes your employees and service providers to sell more if they bring in more revenue. In the Payroll Configuration screen, you can set up commissions as a fixed percentage, an amount based on how much revenue employees bring in, or what an employee sold during a pay period.
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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 Product: Pay commissions as a fixed amount based on what products the employee sold.
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.
Important
If any employee is set up for Tiered Commission by Revenue, only the settings on that tab will apply to that employee.
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.
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. At least one employee profile must already be added and your Payroll Configuration must already be set up. In the US, Vagaro Payroll is recommended to pay your employees by direct deposit and withhold their income taxes.
This option allows you to customize multiple percentages or amounts based on how much an employee charges for a product.
Note
Tiered Commission by Revenue is the default; product-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 Products 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, consider Anna who sold $600 worth of products during the current payroll period. If you set up Tier 1 commission for revenue earned between $0.00 and $499.99 and a Tier 2 commission for revenge earned between $500 and $9999.99, Anna would receive the Tier 2 commission of 40%. You can add an unlimited number of tiers and assign them to any or all of your employees.
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To copy the same commission rate amount to other tiers or employees, select the left/right and up/down arrows.
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To delete a tier, hover over it, then select the Delete
icon.
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Optionally, toggle on the Only Pay Hourly Rate or Commission (Whichever is Larger) switch, then select an option:
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Apply to all hourly pay rates: If the commission earned during a pay period exceeds the total hourly pay, then only the commission will be paid. If the total hourly pay during a pay period exceeds the commission earned, then only the hourly pay will be paid.
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Apply to specific pay rates: Whether only Select Pay Rates (created on the Hourly Pay tab) in the list will be paid the larger of earnings by their hourly rate or commissions.
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Paid Time Off (Vagaro Payroll only): Whether to withhold PTO if the commission is greater than the total number of hours worked and their PTO balance, or to always give PTO in addition to the greater of their commission earned or total hourly pay. In the same example above, you can choose to withhold paying the employee's PTO because the earned commission is more than what would be earned during PTO
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PTO will not be paid if the commission is greater than the combined total of hours worked and the PTO balance.
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The employee will always receive PTO in addition to the larger of their commission earned or total hourly pay.
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Select Save.
Important
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 up Tiered Commission by Revenue for all of your employees and have a specific higher commission for one product by entering it in the Commission by Product tab for each employee.
To set up commission by product:
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Go to → → .
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Select 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.
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Optionally, toggle on the Only Pay Hourly Rate or Commission (Whichever is Larger) switch, then select an option:
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Apply to all hourly pay rates: If the commission earned during a pay period exceeds the total hourly pay, then only the commission will be paid. If the total hourly pay during a pay period exceeds the commission earned, then only the hourly pay will be paid.
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Apply to specific pay rates: Whether only Select Pay Rates (created on the Hourly Pay tab) in the list will be paid the larger of earnings by their hourly rate or commissions.
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Paid Time Off (Vagaro Payroll only): Whether to withhold PTO if the commission is greater than the total number of hours worked and their PTO balance, or to always give PTO in addition to the greater of their commission earned or total hourly pay. In the same example above, you can choose to withhold paying the employee's PTO because the earned commission is more than what would be earned during PTO
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PTO will not be paid if the commission is greater than the combined total of hours worked and the PTO balance.
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The employee will always receive PTO in addition to the larger of their commission earned or total hourly pay.
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Select Save.
Important
ONLY use Save and Run Payroll if you're ready to run the payroll at the same time you save the settings.
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