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Booth rental vs employee classification, tip reporting, retail product sales tax, and commission and hourly payroll — handled correctly from day one, so your salon isn't carrying IRS exposure from worker-classification errors or unreported tips. Plus monthly close and a live per-chair dashboard.
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Turnkey CFO is a bookkeeping firm in Austin, Texas, working with salon owners on the questions that trip up most bookkeepers — booth renters vs employees, tip reporting, retail product tax, commission and hourly payroll, monthly close, and live per-chair dashboards that show whether your chairs are actually profitable. We coordinate with your CPA on tax filings.
Hair salons have worker-classification and tip-reporting rules most bookkeepers have never navigated. Getting them wrong doesn't just create bad books — it creates IRS back-tax liability, penalties, and payroll obligations that follow you for years.
Booth rent, payroll, and retail, tracked clean.
Accurate categorization of service revenue, retail product revenue, booth rental income, supply costs, and payroll. Full monthly close with P&L and balance sheet — separated by revenue stream so you see the real margin of each part of your business. See all services
Booth renters are independent contractors — they set their own prices, use their own products, and control their own schedule. If those conditions aren't met, the IRS may reclassify them as employees, triggering back payroll taxes and penalties. We document the classification correctly from day one and flag any arrangements that create risk.
Tips are taxable wages — they belong in W-2 Box 1 and are subject to FICA. We track reported tip income through payroll so withholding and employer FICA are correct each pay period. Large food-and-beverage tip-reporting rules (Form 8027) don't apply to salons, but direct service tips still must be reported through payroll.
Commission, hourly, or hybrid payroll for employed stylists — minimum-wage compliance checked per pay period (commission employees must meet minimum wage for all hours in the workweek, even if commissions fall short), overtime calculated correctly, Gusto integration.
Hair-care products sold at retail are taxable in most states; salon services are often exempt or subject to different rates. We separate product and service revenue from day one and reconcile sales tax collections to what you owe — so you're not over- or underremitting.
Color, supplies, and product-vendor invoices tracked and paid on schedule — so your AP is current and your cost of goods is accurate for retail margin analysis.
Revenue by service type and retail, gross margin per revenue stream, payroll-to-revenue ratio, booth rental income, and cash flow — updated monthly so you run your salon on real numbers. Behind on the books? Catch-up bookkeeping gets you current first.
A live dashboard — not a stack of PDFs — so you can see which chairs, stylists, and services actually make money, updated every month.
"Phenomenal working with Turnkey CFO — our finances have never been clearer."
Clean monthly books, booth-renter and payroll classification done right, and a dashboard that finally shows per-chair profit.
Worker classification, tip reporting, and retail compliance — the areas where most salon owners unknowingly carry IRS exposure. We know them cold.
True independent contractors — or misclassified employees? The IRS uses behavioral control, financial control, and type-of-relationship tests. A booth renter required to work certain hours, use your products, or follow your service menu may fail — triggering employee reclassification, back FICA, and penalties. We document the classification and flag borderline arrangements before they become audit issues.
Tips are wages — they belong in W-2 Box 1. Stylists are legally required to report tips to their employer monthly. Those tips go into payroll, employer and employee FICA apply, and the amounts appear in W-2 Box 1. Unreported tips create FICA liability for both the stylist and the salon. We build tip reporting into your payroll cycle so it's handled cleanly every period.
Commission stylists must still clear minimum wage for every workweek. If a commission employee works 40 hours and earns $250 in commissions in a state with a $15 minimum wage, she's owed $600 — not $250. The shortfall is the salon's obligation. We check every commission payroll against the minimum-wage floor for all hours worked before each payroll run.
Is your retail line actually profitable after shrinkage and markups? Retail product revenue carries COGS (wholesale cost), shrinkage, and sales tax collection obligations. Without separating retail from service revenue, you can't tell if your back bar is making or losing money. We track product COGS and retail margin separately so you can price and stock correctly.
Products taxable. Services often exempt. Split invoices matter. Most states don't tax personal services (haircuts, color) but do tax tangible personal property (products). Selling a "color service" that bundles products at a single price can trigger tax on the full amount in some states. We separate your revenue correctly and work with your CPA on the right treatment for your state.
Which chairs, which stylists, which services drive your margin? Revenue per chair, average ticket by service type, and cost of product per service — tracked monthly in your dashboard so you make staffing, scheduling, and service-menu decisions with real data. Most salon owners have no idea which services are most profitable until they see the numbers broken out.
We learn your salon — chair count, booth renters vs employees, retail volume, current software, and where the books are a mess.
We connect to QuickBooks, clean historical data, and set up revenue streams and payroll classification around how your salon actually runs.
Monthly close, payroll with tip reporting, per-chair dashboard, and compliance workflows running clean — every month.
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