Thinking About Going Hourly? Here's How to Determine Your Hourly Rate

Are you a salon owner or hairstylist thinking about switching to hourly pricing? 

Many in the salon industry are ditching flat rate service menus and embracing an hourly rate model that offers transparency, consistency, and most importantly, profitability.

Flat rates might seem simple, but they often don’t reflect the true time and cost of your work. With rising product prices, services taking longer, and clients wanting more customized results, flat pricing can leave you underpaid and overworked.

With hourly pricing, you’re in control. You’re getting paid for every minute you work. It makes things more transparent for your clients and helps set clear pricing expectations. Plus, when your color costs go up or a service takes longer than expected, you’re covered. It’s a smarter, more sustainable way to do business and a big step toward building a more profitable salon. (See for yourself with our Profit Calculator)

But here’s the big question:

How do you calculate your hourly rate as a hairstylist?

This is where most stylists get stuck and where SalonScale can help!

Know Your Numbers (Yes, All of Them)

Before you can price anything confidently, you need to know your costs. That includes everything from rent, software, education, and taxes. Get honest about your overhead, what does it really cost to run your chair?

One of the biggest mindset shifts for independent stylists is realizing that your revenue (what you bring in) is not the same as your take-home pay. Just because you made $1,000 this week doesn’t mean that’s what you’re pocketing. 

You have to subtract the real cost of operating your business first, that’s your overhead. Once you know those numbers, you can price your services to ensure there’s profit left over, and that’s your actual take-home.

Separate Your Color Costs from Your Labor

The first mistake most stylists make when setting an hourly rate? Lumping in color product costs with their service price.

Color usage isn’t one-size-fits-all, it varies drastically based on a client’s hair length, thickness, and density. 

For example, let’s say you charge $350 for a full highlight and assume 10% of that ($35) will cover the color. But if that particular balayage uses $50 worth of product, you’ve just lost $15 on materials alone, before even factoring in your time or overhead.

This guesswork eats into your profits and can create long-term financial problems in your salon.

With SalonScale, you can separate your labor from your product costs. Our app measures exactly how much color you use per client, down to the gram, so you can charge for color based on actual usage, not guesswork.

Set Your Income Goal

Now ask yourself: What do I want to earn annually? Be realistic, but don’t sell yourself short. This number is personal, only you know what’s sustainable and fulfilling for your lifestyle.

Once you have that number, divide it by the number of weeks you want to work per year, and then again by the number of hours you want to work each week.

Example:

• Annual income goal: $80,000
• Work weeks per year: 48
• Hours per week: 32

$80,000 ÷ 48 ÷ 32 = $52/hour just to pay yourself.

Add up your total monthly expenses, then divide by the number of hours you plan to work. That’s your baseline cost per hour. Let’s say that’s $25/hour.
You’re now at $77/hour minimum.  Add  20-25% for profit, round that up to $90–$100/hour.

You’re not just working to break even, you’re building a business. Don’t forget to factor in profit, paid time off, raises, education, and future investments. A healthy business isn’t just about today’s pay check; it’s about long-term sustainability.

Test + Adjust Using Real-Time Data

Once you land on a rate that covers your costs, pays your salary, and leaves room for growth, try it! 

Start with a few trusted clients, monitor how long services take, and use tools like SalonScale to track your color costs separately. You might realize you’ve been drastically undercharging for years.

Communicate the Change with Confidence

Switching to hourly pricing is a mindset shift for both you and your clients. But when you have the numbers to back it up, the transition becomes a whole lot easier. 

As customers we are already used to this pricing model in other industries. When your car needs work, you expect to pay separately for the parts and the labor. If a contractor builds you a deck, you pay the hourly rate for the labor and the cost of wood and hardware on top.

This kind of transparency feels normal everywhere else, so bringing it into the salon world just makes sense. It helps clients understand what they’re paying for and builds trust in your pricing.

Let them know:

• Your rate includes your time and expertise
• Color is now charged based on what is actually used (SalonScale!)
• This model ensures fairness for both you and them

Pro tip: Just Be Honest! Clients love transparency, they’ll appreciate knowing exactly what they’re paying for and why.

You’ve done the math, now let SalonScale handle the numbers.

Sign up for your 14-day free trial and see how easy it is to implement hourly pricing with the help of SalonScale.

Get Started Now!

Hourly pricing isn’t just a trendy pricing model for luxury salons, it’s key to building a sustainable business.

SalonScale helps hairstylists like you take the emotion out of pricing and replace it with real numbers. With our app, you’ll finally see the cost of every bowl, track your color usage over time, and confidently set your hourly rate knowing your profit is protected.

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