I have an extra treatment room in my office that I would like to put to use. I have been a clinically based Aesthetician for 5 years now. I am already very busy and have recently purchased an IPL machine that will increase business even more. I would like to bring in a new grad to mentor and help take up the extra clients that I may not have time to see. My dilemma is this - should I lease the space and pay commission on retail or just pay commission across the board? I am providing everything, retail, backbar, equipment, linens and advertising. I know in the long run commission is better for me in regards to increased revenue, but leasing is much less work for me. My view is, if they are paying a lease then they may be more motivated to see and bring in new clients. Whereas with commission they could become complacent since they don't have to worry about making rent. Please, I need help making a decision!
i realize this chat was from a while back but i am in the same situation right now. So would this be a correct, if you are going into a spa that is supplying everything (equipment, clients) it is not legal to be a 1099? or just not a good idea?
You would have to check your state guidelines, but I am now in this exact situation. I don't get to choose my products, but I get paid a split with no taxes taken out and have to supply my own things like cotton, esthetic wipes, gloves, etc. I thought when this changed I would get to choose the products, but that hasn't happened yet, and possibly may not. Just keep a spreadsheet of everything you buy and put money aside for taxes and to purchase supplies. But I think it's still legal for them to do the 1099 and supply the products. I find it ironic that my post from last year says no way would I do this.
so if they supply everything and i have nothing to deduct for my 1099, will the taxes kill me?
Not sure. I guess I'll find out next year. So far I've bought some disposable stuff. I can also write off mileage to training classes, cost of classes, and my ASCP membership. I doubt you will pay any more in taxes than if an employer was taking them out. I'm hopeful even the small amount of write offs will help. I figure I'll put 20-25% into an acct for taxes, just to be safe come next year.
Jodi - things change!
The way I see it, you don't have any choice but to go along.
The "old-timers" in this industry seem to think this is okay (to pay by 1099 instead of W-2) despite what the IRS says.
If the state labor board ever calls them out on it they will really have to scramble! A colleague had to go to a labor board hearing for another matter and the official flat out told the owner that the girl was obviously an employee NOT an IC, and that she should consider herself lucky that the hearing wasn't about that
Re taxes...unless you are in a very high income bracket, and/or have another source of income the taxes aren't much...the worst for me are state and local because they don't have any deductions. But you are so smart to set aside the money!
I work for comission for a medi-spa in PA and have taxes taken out of my check, and prefer it that way. I wouldn't like being independent in someone else's place of business, and to have to track what to put aside to cover taxes and such. If I could legally rent a room, I would want to provide and use my own equipment, products, etc. I would find it hard to pay rent for, but not be allowed to run my business the way I wanted.