Commission Only
Back to service sales targets & commissions
Commission Only pay is typically for self-employed business models where the salon owner wishes to track the service providers payments (record hours worked etc.).
Within Loop hr you can build as many commission levels as you wish, plus add special bonuses for achieving particular financial goals, we will cover this later in this article.
Setting up your Commission Only structure
[1] From the navigation select Business > Employee [2] Remuneration (at this stage you would be in Base pay, the base-pay-rate will be zero). [3] Click Service Targets & Commissions [4] then Commission [5] and select Commission Only.
Within the Loop hr screen, scroll down to see the first target
The employee in this case may not be an employee, therefore the Employee means the ‘worker’.
There is no base pay so the first target is zero, commission (at whatever level you set) is earned from the first Dollar/Euro/Pound.
Add higher commission levels for higher service sales targets.
Targets and sales data feed through to the employee/worker Loop hr Dashboard (when “Can this employee see their financial targets” is toggled on). See the screenshot below ★.
For information about sales data, please visit this article.
[6] Change the commission percentage figure to the commission percentage you wish to use.
[7] The first (Level) financial target should be set to zero.
[8] Add a second and/or multiple commission levels by clicking the green plus sign and adding your commission percentage and set the target.
[9] To incentivise a team member to focus on achieving a specific financial target you can use a special ‘driver bonus’. Simply toggle Bonus on and enter a stretch target that the employee must achieve through the work period to be eligible for the bonus. You can also add a Super Bonus for higher levels of income and a second stretch target. See the example below.
Sales Performance Graphic
Example Commission Only
Visualise your team member’s pay structure, see the sales forecast for a typical work period. See when various commissions levels and/or bonuses and related to income. See the workers earning potential increase and essentially, understand the costs associated to pay (toggle on ‘Display % Costs’ at the top of the Graphic).
A graphic like this is generated for every revenue producing team member using their specific employment terms and targets; it is designed to demonstrate how the employee can earn higher levels of income and how the commission structures will impact your costs.
Team Bonus
There are further incentive options available with Team Bonuses, Manager and Front of House bonuses, see https://loophr.com/knowledge-base/team-bonus/ for more details.
Need help? No problem, book a FREE support call and we’ll answer any questions, walk you through the pay options and help you set your pay structure! Simply choose a convenient time for you, book here.
Loop hr will use a combination of employee profile settings, sales data and information from the schedules to forecast targets, work out holiday allocations and calculate commissions and bonuses and feed data to Payroll and Performance reports. You must record accurate information, not only for compliance, but to help protect you and your team.
Employee profile settings: ensure any changes in work arrangements or contractual terms are recorded accurately and in a timely manner within the employee profile settings (click Update within the profile after making changes).
Sales data: the system will track individual employee sales and performance – to see how to enter sales data figures, go to Business > Sales Data. Visit this knowledge base article for more details.
Schedules: scheduling can be as complex or as simple as you make it, KEEP IT SIMPLE, we recommend you set standard schedules, use overtime (paid and unpaid) with time off in lieu (TOIL) to fill gaps and give time back. Check the schedules reflect what is happening in reality on the salon floor. It takes a minute to update a work schedule, it takes hours to manage payroll when you have to manually calculate them! For more information on managing schedules visit this knowledge base article.
For revenue producing team members, when an employee is on holiday the target for the period would be reduced proportionally.
The system helps manage Employee Performance, reporting sales progress back to the employee via their Loop hr Dashboard (relevant to the settings, see notes above ★).
Payroll: Loop hr will collate and feed essential information through from the various reports including overtime, sick, bonuses and commissions earned into the payroll report.
In line with UK/EU employment law; within payroll in Loop HR, holiday pay for average commissions and bonuses are calculated and shown in the payroll report based on an average pay over the past 12 months.
Back to service sales targets & commissions
