Magazine for the professional nail industry.
Issue link: http://nailsmag.epubxp.com/i/139413
Starting Your Career KNOW YOUR COMPENSATION OPTIONS Believe it or not, some techs graduate from nail school and immediately open up their own salon. Most, however, wait to get some experience first. If you're not ready for salon ownership, you can get to work as either an employee or a booth renter. Read on to learn the diferences between these types of techs. HOW TO ESTIMATE YOUR TRUE INCOME FOR AN EMPLOYEE: Line 1. ANNUAL EXPENSES Line 2. FICA (social security and Medicare taxes) (7.65% of line 1) Line 3. WHICH JOB DESCRIPTION IS RIGHT FOR YOU? A SALON OWNER: • Leases or owns the salon property • May hire employees, rent out booths, or work solo • May provide equipment and supplies for employees • Has discretion over salon decor, marketing, hours of operation, retail lines • May provide benefits for employees AN EMPLOYEE: • Receives a salary and/or commission (plus tips) • Can be required to work certain hours, follow certain procedures, adhere to a dress code • May receive training, performance goals, and evaluations from the salon owner • Has payroll taxes withheld from her paycheck • May receive benefits like vacation and health insurance A BOOTH RENTER: • Pays a fee (rent) to lease a space in a salon • Sets her own prices and collects money directly from her clients • Determines her own service offerings • Pays for her own supplies • Pays her own taxes and insurance • Does not receive any benefits Annual gross income (salary, service and retail commission, and tips) _______ _______ Estimated federal and state income tax (15% of line 1*) _______ Cost for tools not provided by employer _______ Line 5. Total of lines 2-4 _______ Line 6. Annual take-home pay (subtract line 5 from line 1) _______ Line 4. FOR A BOOTH RENTER: Line 1. Annual gross income (gross service and retail income and tips) _______ ANNUAL EXPENSES Line 2. Space rental Line 3. _______ Tools, supplies, cost of retail product _______ Line 4. Phone _______ Line 5. Liability insurance _______ Line 6. Marketing and advertising _______ Line 7. Misc. expenses (accountant, You might prefer to be a booth renter if you enjoy the following: • Being your own boss and making decisions independently • Wearing many hats • Having the challenge of building a clientele _______ Line 8. Total of lines 2-7 _______ Line 9. You might prefer to be an employee if you enjoy the following: • Being part of a team • Receiving training and feedback • Relying on a salon owner to help build your business • Bearing less financial responsibility mileage, bank fees, etc.) Adjusted gross income (subtract line 8 from line 1) _______ Line 10. SECA (self-employment contributions tax) (15.3% of line 9) Line 11. _______ Estimated federal and state tax (15% of line 9*) _______ Line 12. Total of lines 10-11 _______ Line 13. Annual take-home pay (subtract line 12 from line 9) _______ *This is just an estimate. The actual amount will vary depending on your tax bracket. 18 | 2013 NAILS CAREER HANDBOOK