Cosmetology school teaches you how to pass your state’s licensing examination, but it’s up to you to learn how to manage your business in order to maximize your earning potential.  Popular websites for estimating salaries, like Payscale and Glassdoor, don’t always tell the whole story.  Tips are notoriously under-reported, so deriving numbers from the US Bureau of Labor Statistics, for example, isn’t always reliable. In order to determine how much you’ll be earning, you have to understand how cosmetologists get paid.

Hourly Wage for Cosmetologists

Most cosmetologists in the US are paid an hourly wage. Franchise salon chains, like Supercuts or Great Clips pay their staff an hourly wage.  Stylists can often earn commissions and bonuses from product sales, as well as tips.  You can increase your income by selling more products and improving the customer service skills that lead to better tips.  An obvious way to improve your customer service is to make sure that you’re always working to improve your skills, and making sure each customer leaves happy. For example, if your salon doesn’t charge extra for shampoo, consider adding the service as a habit, the relaxing nature of the scalp massage can easily turn a $2 tipper into a $5 tipper.

Annual Salary for Cosmetologists

Vacation resorts, retirement homes, and even some large corporations have onsite hair salons where cosmetologists earn an annual salary. There are benefits and drawbacks to this type of work. The salary is often higher than what you’d make with an hourly position, but the tips may not be comparable and your clientele won’t likely follow you to your next gig. Additionally, some of these work environments offer little in the way of product sale commissions. If you’re working in this type of setting, customer service is, again, your biggest asset. Make yourself indispensable. If everyone loves the work you’re doing, you’ll be in a better position to ask for raises and bonuses. A “hidden” benefit of jobs like this is that they often provide paid time off, 401k retirement plans, and health insurance, which hourly positions often don’t accommodate.

Station Rental

Stylists who rent a station are often free to charge whatever the market will bear for their services. The cosmetologist pays the salon owner a monthly or weekly fee and keeps all, or a large percentage of the income they bring in.  This is most profitable when you’ve built up a following.