Compensation on Product Sales

Things to know:

• The ability to configure commission for product sales on a staff profile is governed by the "Accessing Staff Compensation" access control setting.
• Straight Commission: You can pay staff a straight percentage commission or a flat commission per product. 

• Tiered commission by revenue: The commission is calculated based on All Revenue Earned or Amount Above Earned. You can set the base rate on which the commission is paid for the first tier and then add as many tiers as you like. 

  • Amount Above Earned: This setting applies a tiered commission for each revenue threshold reached. The commission is calculated by subtracting the tier threshold from the revenue and multiplying the difference by the tier percentage (revenue - tier threshold x tier %).

  • All Revenue Earned: This setting applies a single tier, corresponding to the total revenue. The commission is calculated by multiplying the total revenue by the tier percentage (total revenue x tier%).

• Tiered commission by productivity: The commission is calculated based on All Revenue Earned or Amount Above Earned.
  • Amount Above Tier: This setting applies an incremental commission for each productivity threshold achieved. The commission will be calculated as (productivity - tier threshold) x tier % x clocked hours.
  • All Revenue Earned: This setting applies only to one tier, the one that matches the overall productivity. The commission will be calculated as (productivity x tier % x clocked hours).
• If you set the product commission at the category level, it overrides the commission set on the main screen.
• Staff commission on product sales is determined by the following:
  • Custom Discounts (Manually Applied to the Ticket): The commission is calculated based on the "Calculate Product Commissions Post-Discount?" setting on the Business Setup > Settings page. 
    • If set to YES: Commission is calculated based on the discounted product price (after discounts are applied). 
    • If set to NO: Commission is calculated based on the original product price (before discounts are applied).
  • Promotions (Manually or Automatically Applied to the Ticket): When a promotion is applied to a ticket, the commission is calculated according to the pre/post-discount setting configured on the promotion itself.
  • Membership Discounts: If a membership discount is applied to the ticket, the commission is calculated based on the pre/post-discount setting configured within the membership template.
• If a staff member’s commission structure is updated midweek, the changes will apply to the current and future pay cycles in the compensation reports. Previous payments will remain unchanged. Example: If a staff member’s tiered commission by revenue rate was 10% for revenue above $300 and is updated to 15% on a Tuesday, the new 15% rate will apply to the current and all subsequent pay cycles. Additionally, you can choose to apply the updated commission rate to past purchases—but only if the compensation type is set to Straight Commission.
• When a ticket is fully refunded, the commission will be removed. If the ticket is only partially refunded, the commission will be adjusted based on the remaining amount.

Contents:

• Setup Commission
• Product Commission Checkbox
• Straight Commission for Products
• Tiered Commission by Revenue
• Tiered Commission by Productivity
• Compensation by Product Category

Setup Commission

To set up compensation for products:

1. Navigate to Location Setup > Staff & Availability
2. Filter by the desired location
3. Select the staff member's profile                                                                                                                                                    
4. Scroll down to the Compensation Reporting > Product Commission section

Product Commission Checkbox

Only pay if retail revenue is at least X% of service revenue

This setting ensures that staff members receive commission only if their retail sales reach a minimum percentage (X%) of their service revenue. It’s designed to encourage staff to actively promote and sell retail products alongside their services.

• If the staff member’s retail revenue is equal to or greater than the set percentage of their service revenue, they will earn commission.
• If their retail revenue is below the threshold, no commission will be paid.
• Example: Threshold: Retail revenue must be at least 50% of service revenue.
  • Scenario 1: 

    Service revenue: $212

    Retail revenue: $120 (56% of service revenue)

    Commission is paid and displayed normally in the compensation report because the threshold was met. 

  • Scenario 2: 

    Service revenue: $212

    Retail revenue: $40 (18.8% of service revenue)

    The product commission section in the compensation report is greyed out, indicating no commission is paid because the threshold was not met.

Straight Commission for Products

Setup:

Straight Commission: Percentage

Product Value: $50

Commission Value: 5% per product

Total commission: $2.50 ($50 x 5%)

Straight Commission: Flat Amount

Product 1 Value: $50

Product 2 Value: $40

Commission Value: $15 per product

Total commission: $30

Tiered Commission by Revenue

Setup:

Pay Cycle: Weekly

Staff Member: Sara Lee

Product Revenue: $680

Commission Tiers:

• Tier 1: $0 - $500 per pay cycle, then pay 25% of the revenue earned
• Tier 2: $500.01-$3,000 per pay cycle, then pay 30% of the revenue earned
• Tier 3: $3000.01 and above per pay cycle, then pay 40% of the revenue earned

If Tiered Commission by Revenue: Amount Above Earned is selected, the total compensation for this staff member will be calculated as follows:

1st tier:

Revenue = $500

Commission = 500 x 25% = $125

2nd tier:

Revenue = $179.99

Commission = $179.99 x 30% = $54

Total commission: $125 + $54 = $179

If Tiered Commission by Revenue: All Revenue Earned is selected, the total compensation for this staff member will be calculated as follows:

$680 x 30% = $204

So, the total commission is $204.

Tiered Commission by Productivity

Setup:

Pay Cycle: Weekly

Staff: Gary White

Clocked Hours: 5

Product Revenue: $250

Product Productivity: $250 / 5 = $50 

Commission Tiers

Above $0 per pay cycle, then pay 10%

Above $30 per pay cycle, then pay 20%

Above $45 per pay cycle, then pay 40%

If Tiered Commission by Productivity: Amount Above Earned is selected, the total compensation for this staff member will be calculated as follows:

(Productivity − Tier Threshold) × Tier Percentage × Clocked Hours

Given:

Productivity = $50

Tier Threshold = $45

Tier Percentage = 0.4

Clocked Hours = 5

The calculation is:

($50 - $45) x 0.4  x5

($5 x 0.4) x 5 

$2 x 5 = $10

So, the staff member's total compensation is $10

If Tiered Commission by Productivity: All Revenue Earned is selected, the total compensation for this staff member will be calculated as follows:

Productivity × Tier Percentage × Clocked Hours

Given:

Productivity = $50

Tier Percentage = 0.4

Clocked Hours = 5

The calculation is:

($50 x 0.4) x 5

$20 x 5 = $100

So, the staff member's total compensation is $100

Compensation by Product Category

To set up compensation per product category:

1. Select the set compensation by product category link
2.  A modal will open where you can enter the amount the staff member should be paid per product category                      
3. Save

Compensation per Category Setup:

Hair Care: 10%

Lash Care: $5

Skin Care: 15%

Example:

If two products from the skin care category are purchased, valued at $50 and $40 respectively, the staff member will earn $13.50 in commission. The commission is calculated as ($50 + $40) x 15%.

If a product from the lash care category and a product from the hair care category are purchased, valued at $15 and $25 respectively, the staff member will earn $7.50 in commission. The commission is calculated as $5 for the accessory product and $2.50 ($25 x 10%) for the hair care product.

For more information, contact our support team at support@mytime.com. 

Related Articles:

Revenue and Compensation for Multi-Staff Services

Revenue and Compensation for Multi-Client Services

Compensation on Package Sales

Compensation on Membership Sales

Compensation on Gift Card Sales

Commission on Appointments, Classes and Products in Membership

Commission on Appointments, Classes and Products in Package

Daily Compensation Report

Compensation (by Pay Cycle) Report