Booth renter or employee
Booth renters run their own business. Commission stylists who follow your schedule and prices are usually employees.
How we helpWe review how each stylist works and set up booth rent agreements or payroll to match.
Care and personal services · Tax · Books · Insurance
Tax, books and insurance for salons, barbers and spas
Booth renters, commission stylists and tips all follow different rules. We set them up right and cover your chairs, your staff and your clients.
Hair salons, barber shops, nail salons and spas work with our office for booth rent and commission payroll, tip reporting, retail sales tax and salon coverage.
Reviewed by Orkun Ozkaymak, CPA, MBA·Clients in all 50 states and abroad
Salons, barbers and spas
Service, retail and rent in one room
Salons earn from services, product sales and booth rent. Each stylist may be an employee, a commissioned stylist or an independent booth renter, and tips run through every model.
Our office sets up the right model for your team, runs payroll and tip reporting where needed, and our agency covers your space and professional services.
Special needs
What makes salons different, and how we help
Where salon owners most often need help.
Tips and new tip rules
Tips must be reported through payroll for employees, and recent federal changes added a tip deduction for workers and extended the FICA tip credit to beauty services.
How we helpWe handle tip reporting and claim the employer tip credit where it applies.
Retail product sales
Products sold to clients are taxable, while most services are not.
How we helpWe set up your POS to tax products correctly and file sales tax each month.
Client injuries and claims
A chemical reaction or a slip can become a claim against the salon.
How we helpOur agency quotes salon coverage with general and professional liability.
One coordinated office
Services for salons and spas
Tax, accounting and insurance under one roof, so the numbers on your return, your books and your policies all agree.
Tax and accounting
Payroll taxCommission payroll and tip reporting.Learn more Sales taxSales tax on retail products.Learn more QuickBooks bookkeepingQuickBooks with services, retail and booth rent.Learn more Individual income taxReturns for booth renters and independent stylists.Learn more Business income taxSalon business returns.Learn more
Calendar
Filings we keep on schedule
The recurring deadlines salons and spas face most often. We track them for you and send reminders before anything is due.
- 20th of each monthIllinois sales taxForm ST-1 for product sales.
- QuarterlyForm 941 and state payrollIncluding reported tips.
- January 31W-2 and 1099-NECWage statements and contractor forms.
- Apr 15Jun 15Sep 15Jan 15Estimated paymentsFor booth renters and owners.
Dates shown are for calendar-year filers. When a due date falls on a weekend or holiday, it moves to the next business day.
QuickBooks Online
Books built for salons and spas
Your QuickBooks separates services, retail and booth rent, so you can see what each part of the salon earns.
Our office sets up QuickBooks Online with a chart of accounts designed for your industry and your entity type, mapped line by line to your tax return. Your books are ready for filing season all year.
Chart of accounts
- 41000Service revenueIncome
- 41200Retail product salesTaxable
- 41400Booth rent incomeIncome
- 51000Retail product costCOGS
- 51200Back bar suppliesExpense
- 21700Tips payableLiability
Mapped to your tax return lines
Questions
What salons and spas ask us
Do booth renters get a 1099?
Booth renters pay you rent, so you usually do not issue them a 1099 for their services. They file their own returns. We help both owners and renters.
Can salons claim the FICA tip credit?
Federal law changes in 2025 extended the credit for employer Social Security and Medicare paid on tips to beauty service businesses. We review whether your salon qualifies.
Do I charge sales tax on haircuts?
In Illinois, services like haircuts are generally not subject to sales tax, but products you sell are. We set up your POS accordingly.
Related industries
All industriesRestaurants and food serviceThin margins, tipped staff and daily sales tax. We reconcile your POS, handle tip reporting and claim the credits restaurants often miss.Explore Retail and e-commerceSelling in one store or fifty states, sales tax follows you. We track nexus, reconcile marketplace payouts and keep inventory accurate.Explore Medical and dental practicesYou care for patients. We handle entity planning, owner pay, equipment and retirement strategy so your practice keeps more of what it earns.Explore
Next step
Let's talk about your business
Request an insurance quote, or start your company with our office. Prefer to talk first? Book a time, virtual or in person.