Salon payroll in India: salary, commission, loss of pay and payslips

Salon payroll in India usually means one sum each month: a fixed salary, less loss of pay for unpaid days, plus commission on services and products, plus tips and any bonus, less fines and advance recovery. The trick is doing it the same way every month, from records staff can see. This guide shows each part with numbers, including the common ways to work out one day’s pay, and then explains at a high level where statutory items like PF, ESI, professional tax and TDS fit. For those, your CA is the person to ask.

What goes into a salon payslip

Gross pay is the earnings added up. Net pay is gross less deductions. A clear payslip puts the two columns side by side, with the days worked, offs, leave and loss-of-pay days at the top, and the amount in words at the bottom.

Paid days

Most salons pay a monthly salary for the whole month, then take off the days that weren’t paid. So the first number to get right is paid days:

Paid days = days worked + paid weekly offs + days the salon was closed (including holidays) + approved paid leave.

Everything else is loss of pay (LOP): absences, unpaid leave and any half days lost to late rules. If your attendance is right, payroll is mostly arithmetic. For setting those rules fairly, see salon staff attendance.

Loss of pay: what one day is worth

To take off a day, you need one day’s salary. There are three common ways to work it out, and you should pick one for everybody:

• Days in the month: monthly salary ÷ 28, 29, 30 or 31.
• 30 every month: monthly salary ÷ 30.
• 26 every month: monthly salary ÷ 26, treating the four weekly offs as unpaid days.

Worked example. A stylist on ₹15,000 a month, in a 30-day month, worked 24 full days and one half day (24.5), had 4 weekly offs and 1 day of approved paid leave. Paid days are 24.5 + 4 + 1 = 29.5. That is half a day of loss of pay: 0.5 × ₹15,000 ÷ 30 = ₹250. Salary for the month: ₹14,750.

The same half day costs a different amount depending on the method:

Dividing by 26 makes each lost day cost more. That isn’t wrong, but staff should know it before they take a day off, not after.

Commission, incentives and tips

Commission is added on top of salary, worked out on services before GST and after discounts. Slabs, product commission, targets and a guaranteed minimum are explained in how to work out stylist commission, and packages in commission on packages. Try your own numbers in the commission calculator.

Tips are the client’s gift to a person. Either hand them over in cash at day end or add them to the payslip, but don’t do both, and don’t keep a cut. If you pay them with salary, show them on their own line.

Advances and other deductions

An advance is salary paid early, so it comes back out of pay. Take it back in agreed instalments, and never more than the pay left after other deductions, so nobody ends a month with nothing. What isn’t recovered carries to the next month. The full method, including write-offs and the cash drawer, is in staff advances.

Any other deduction, such as a fine or a stock shortage charged to someone, should have a written reason the person has seen.

PF, ESI, professional tax, TDS and minimum wages

These depend on your headcount, each person’s wages and your state. The outline below is a starting point for a conversation with your CA, not advice for your salon.

• The labour codes. Four labour codes, including the Code on Wages, 2019 and the Code on Social Security, 2020, came into effect on 21 November 2025, replacing 29 older labour laws. The government has said the older rules carry on during the change-over while new rules are made.
• Provident fund (PF). The government says EPFO provisions now apply to all establishments employing 20 or more employees.
• ESI. ESIC coverage is mandatory for establishments with more than 10 employees, and voluntary for smaller ones.
• Professional tax. A state tax on employment, deducted from salary where the state charges it. The Constitution caps it at ₹2,500 a person a year. Whether it applies, and at what rates, depends on your state.
• TDS on salary. Where a staff member’s salary is above the taxable limit, the employer deducts income tax from it. From 1 April 2026, the Income-tax Act, 2025 replaced the 1961 Act, so check the current rules with your CA.
• Minimum wages and appointment letters. Under the Code on Wages every worker has a right to minimum wages and to be paid on time, and the government’s summary of the codes says every worker should get an appointment letter. Check the current minimum wage for your state and each person’s skill level.

A month-end routine that takes an hour

1. Close attendance. Approve or turn down open leave and correction requests.
2. Check the bills. Make sure every service has the right stylist.
3. Review each person. Add any bonus or deduction with a note; change this month’s advance recovery if someone needs a lighter month.
4. Lock the month once it’s over, so the numbers can’t move.
5. Pay and send payslips. Record how each was paid: cash from which drawer, UPI or bank.

A correction found after locking goes into next month as its own line, never by changing an old payslip.

Payroll in Frizzi

Frizzi payroll is in Pro. You set each person’s pay once (salary, commission, or both; presets help), and each month it is worked out live from attendance and bills. Loss of pay uses days in the month by default, or 30 or 26. You review, lock the month, mark it paid (in parts if you like) and send each payslip as a PDF or on WhatsApp. Staff see their own payslips and “this month so far”. See pricing or the demo.

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