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Blog / Med spa flat rate vs tiered commission: Discover which model to choose

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Med spa flat rate vs tiered commission: Discover which model to choose

Tijana Kargovska
October 22, 2025
Reviewed by: Teodor Jurukovski

The commission structure you choose as a business owner is the foundation of your team’s satisfaction, but more importantly, the bottom line of your business’s revenue health.

Flat rate or tiered commission; there is no right or wrong structure, but that doesn’t mean either option will work for your team or you equally.

The best way to go about this is to understand both flat-rate and tiered commissions, their pros and cons, and then pick the one you wish to implement in your business model.

This article will help you get there faster – so let’s start!

Understanding commission structures in med spas

Let’s start from the basics: What is commission-based pay, exactly, and how does it work? 

In a med spa, commission-based pay means team members earn a percentage of revenue from each service or retail product sale they generate. 

Sometimes commission structures are layered on top of an hourly rate or base salary, and other times, they stand alone. So, you need to decide whether to pay commissions, and if so, which structure to use?

There are several popular versions of pay structure in medical spas:

  • Hourly plus commission: Staff members get a reliable base pay and can boost their earnings through sales.
  • Flat-rate commission: Everyone receives the same flat value or fixed percentage on all services or retail sales, regardless of performance or seniority.
  • Tiered commission: Staff can unlock higher commissions as they increase their sales: a percentage “tiers up” with set sales milestones.

With a well-structured compensation system, you can spark motivation among your team, enhance upselling, and retain talented staff. 

In fact, studies show that 57% of workers say commissions or bonuses boost their performance, while about 52% feel these incentives help keep them focused on their goals.

commission types pabau

Source: Pabau

Flat-rate commission: Simplicity and predictability

Flat-rate commission is all about clarity. With this model, everyone knows what to expect: a set commission percentage or an exact amount that’s paid out.

flat-rate commission

Flat-rate commissions are simple and predictable, so everyone knows exactly what they’ll earn without any complicated calculations. They’re especially fair for newcomers or junior staff still building their client base, providing steady income as they grow.

However, flat-rate commission can lower the “above and beyond” spark in your team if there’s no extra reward for reaching or exceeding targets. 

When everyone gets the same commission percentage whether they upsell or not, staff will do what’s needed, but might not push for more.

Tiered commission: Incentivizing performance

Tiered commission structures can be more exciting and have higher potential. In other words, the more staff members bring in, the higher their commission rates become. 

For example, an esthetician might earn a 15% commission up to $600 in services for the month, then jump to 20% between $600 and $1,200, and even 25% if they exceed $1,200.

tiered commission

Source: Pabau

Tiered commissions make sure your team’s efforts line up with important goals like growth and referrals, while giving top performers extra rewards.

Plus, team members get clear goals to aim for higher pay, motivation to exceed their usual targets, and recognition that shows up not just in praise but in their paycheck.

That being said, tiers can be complex, especially if the structure isn’t communicated well or if multiple tiers are layered with retail bonuses. 

So, it’s important to review targets together with your team and make sure everyone understands exactly how the pay structure works.

Hybrid and custom approaches

If you can’t decide on which commission structure would best suit your team, some hybrid models combine hourly pay, flat-rate, and tiered commission.

A classic example is the hourly base wage plus tiered commission. This way, team members rely on a steady paycheck, but also receive rewards for exceeding performance milestones.

Some spas offer different commission rates for junior versus senior staff, or for different services. For example, a laser technician might earn a higher commission percentage on advanced treatments than a massage therapist on standard services.

Hybrid models can also factor in other performance-based rewards, such as bonuses for monthly retail sales or referral programs for bringing in new clients. 

A bit of inspiration and real-world example, estheticians on Reddit frequently share that service commissions usually range between 30% and 50%, with retail commissions around 10%, showing how commission rates can vary by experience, location, and spa policies.

How to choose the right model for your med spa

Before you land on a commission model, consider these big questions:

  • Where is your business in its growth journey? If you’re just starting out, simplicity might be your best friend. If you’re scaling rapidly, you may need tiered incentives.
  • What are your staff’s experience and expectations? Experienced staff often expect access to higher commission tiers, while newer staff may appreciate predictability.
  • What are your revenue and client retention goals? Are you prioritizing sales growth, consistent service, or a blend?

Think about whether you are competing for experienced talent (in which case a more aggressive or hybrid model might be more suitable) or whether you want to foster a team-first, supportive culture (which is well-suited to flat-rate or hybrid approaches).

Finally, always consult a legal or business advisor regarding local employment laws before rolling out a commission plan, especially in healthcare settings or when employing licensed staff members.

Best practices for implementing commission plans

Even the best structure can fail without clarity and transparency. Here are a few tips to help you successfully roll out commission plans in your med spa:

  • Put your commission policy in writing, and give every staff member a copy in the employment contracts
  • Review and discuss plans openly 
  • Communicate targets and tiers in plain English and avoid jargon
  • Train your staff so they know how to make the most within the structure you set
  • Adapt your plan as your business grows 

Most importantly: Use clear commission tracking tools and be proactive about addressing pay disputes or misunderstandings. A commission plan should help your team feel motivated, not mystified.

How Pabau supports flexible commission management

Managing commissions by hand will be a bigger hassle than you think. Luckily, practice management software like Pabau was designed to take these issues off your daily tasks.

With Pabau, you can be on top of payroll: set up customizable commission rules for each staff member, service, and product category, so everyone’s unique role is recognized. The system automates calculations, reduces manual errors, and saves you hours of admin work. It’s also a huge help in preventing any confusion or payout disputes down the line.

A bonus: Detailed commission reports give both you and your team total transparency over payouts.

Source: Pabau

Make commission a growth driver, not an admin headache

When your commission plan works, everyone wins: Your team stays motivated, and your business keeps growing. 

Treat your commission plan as something that evolves with your med spa. eview it regularly, listen to your staff, and make adjustments as you grow.

Want to see how easy commission can be? Book a demo with Pabau and transform pay from a headache into a serious business win for your medical spa.