What does it mean to rent a chair in a salon?

Views: 1,343

Share this article...

Rent a chair

It is common practice for babers to ‘rent a chair’.

What does it mean to rent a chair in a salon?

Many hairdressers rent a chair in a salon on a self-employed basis, paying rent and taking the profits they make. It’s a common arrangement, enabling the salon to avoid employment responsibilities, and enabling the hairdressers to effectively run their own business, potentially earning more and having more flexibility on when they work.

How does self-employed hairdressing work?

Basically, a hairdresser renting a chair in a salon will pay rent to the salon, either at a fixed rate, or a share of their fees.  Anything after that is kept by the hairdresser and they’re responsible for their own tax and any other accounting/financial matters (so it’s best to get advice on such liabilities).

It’s always best to have a written contract in place, setting out the rent/share of takings that is to be paid, and any other terms the parties want to agree. However, as both parties probably want to make sure it’s a self-employed arrangement, it’s important not to make the contract look like an employment contract.

Employment status – the question of whether someone is an employee, a worker, or genuinely self-employed – is a really thorny area.  See elsewhere on our website for more information on this.  Suffice to say, the more control and restrictions placed on the person working or providing services, the more it looks like an employment relationship.

It follows that one of the potential downsides for the salon owner of renting chairs, rather than employing hairdressers, is that they can’t control where the hairdressers move on to and whether they can take their clients with them when they leave. Ultimately, the flexibility for both parties of the self-employed chair rental arrangement has pros and cons for both parties too.

Is it better to be a self-employed hairdresser?

This is a question for each individual hairdresser and salon owner. Some salons and chains always employ their staff, whilst others only rent chairs, and yet others do a mix of both.

Of course, if employing employees, the salon is responsible for PAYE, employee’s and employer’s National Insurance Contributions, as well as pension contributions. The admin load involved in employing people, especially for small salons, might make renting chairs and avoiding having employees, attractive to them.

Apprentices would usually be employed by the salon, partly because of how the apprenticeship regime works, and partly because the salon would want to be able to set requirements for working hours/days and what the apprentice has to do as part of their job.

Experienced, more senior hairdressers are a different piece though – more likely to want to carve out their own reputation and create and build their own business. An employment arrangement gives certainty, regular hours and regular income. But a self-employed arrangement allows total control and flexibility for the hairdresser to work where and when they want to. Whilst their income will depend on how much they work, as long as they meet their chair rental payments, the rest is theirs to keep (well, the rest after paying tax, contributing to their own pension, paying VAT if they’re over the VAT threshold, and so on!).

From a salon’s perspective, taking only a share of the takings is probably risky in the sense that if the hairdresser doesn’t work “enough” the salon won’t make what they want.  So, a minimum guaranteed rental plus an additional specified share of takings, or a higher fixed rental, will often work better for salons.

There are other considerations involved in deciding whether to be employed or self-employed, such as who provides materials and products, but these are outside the scope of this blog.

HMRC money

There are tax implications to being self-employed versus employed.

What is employment status?

We’ve talked a lot about employment status in this blog. There’s more information elsewhere on our website, but the basics are:

  • Your employment status is your legal status at work
  • If you work for someone else (a business) you’re likely an employee or possibly a worker. Your employer will have control over what you do, how you do it, and where and when. They will give you all the tools and equipment you need to do your job.
  • If you own your own business or trade, you’re self-employed – or you might own a business that employs you as an employee, so wear two hats.
  • If you’re an employee you get the full range of employment rights, including unfair dismissal, discrimination rights, statutory sick pay, National Minimum Wage, paid annual leave, maternity/paternity/adoption leave and pay, and so on.
  • If you’re a worker, you get some of those rights including discrimination, National Minimum Wage, paid annual leave, but no unfair dismissal or maternity/paternity/adoption rights.
  • If you’re genuinely self-employed, you get no employment rights, though you do have rights under your contract (whatever that says).

It can get really complicated!

Employment Solicitors

If you have any queries about working as a hairdresser, owning a salon, or renting a chair, do get in touch with our employment specialist lawyers at employment@Qlaw.co.uk or on 03300 020 863.

Share this article...

More on this topic