The main models
- Hourly — predictable for both sides, common for front desk and support roles.
- Salary — predictable, more common for management roles.
- Commission — pay tied to production, common for service providers (see our Commission Structure Considerations guide).
- Hybrid (base + commission) — combines some income predictability with a production incentive.
- Booth rental — not an employee compensation model at all, but an alternative business relationship (see our Booth Rental vs. Commission Overview).
Match the model to the role
Roles with direct, measurable production (service providers) often fit commission or hybrid models well; roles without a clean production measure (front desk, management) more commonly fit hourly or salary.
A hybrid base-plus-commission model can ease the transition for new service providers still building their client base, since pure commission can feel financially risky before they have steady bookings — consider this especially for new graduates.
Consistency matters as much as the specific structure
Whatever model you choose, apply it consistently across similar roles — inconsistent, individually-negotiated compensation structures for similar positions can create real morale and fairness issues if discovered by staff.
Confirm your chosen structure complies with applicable minimum wage and overtime rules for the specific classification (hourly vs. salaried, employee vs. contractor) — commission and hybrid models still generally need to meet minimum wage requirements in many cases. Consult a payroll professional to confirm compliance.
Frequently asked questions
Can I use different compensation models for the same role across different staff? This can create fairness concerns and is generally best avoided unless there's a clear, defensible reason (a trial period structure for new hires, for example, applied consistently).
How do I decide between commission and hybrid for service providers? Consider your business's stage and your team's experience level — hybrid can reduce risk for both new team members and a newer business still building consistent volume.
