Staff commission on service sales: how to calculate it
In many service businesses, a staff member's pay is tied to the work they do — a percentage of service turnover. That's often how it works in workshops, massage studios and other maintenance services. The idea is simple, but at the end of the month it turns into an Excel sheet that takes half a day to put together and gets argued over.
The arguments always come from the same places: is the amount with or without VAT, do the spare parts or materials count, what happens with a discounted service, and where is the job that didn't make it onto an invoice yesterday.
This article sets out the logic I used to build the payroll calculation into the NUNDINAE platform. The actual percentages and contract terms are an agreement between the business and the employee — this is only about getting the basis of the calculation right.
Four things that need to be separated
1. VAT
The amount the customer pays includes VAT. The basis for staff pay is usually the amount excluding VAT — otherwise you're paying commission on the part that goes to the state. NUNDINAE calculates the services total excluding VAT at the rate set in the settings, so there's no dividing by hand.
2. Materials and products
If an invoice has €75 for the service and €25 for materials, the €25 isn't the staff member's work — it's goods. Whether it's a spare part, oil or a care product. The same goes for a product the customer buys to take home. In the payroll report these appear in a separate "Materials and products" column for information, but they don't count towards pay.
This assumes the materials are on a separate line of the invoice and come out of stock. In NUNDINAE that's natural, because the booking invoice, the till, the online store and the stock are one application: goods added to an invoice come off the same stock level the online store sells from. Materials can also be invoiced by actual usage, in grams for example — I wrote about that in inventory management with a barcode scanner.
3. Discounts
If a customer gets 10% off a service, the staff member's calculation basis goes down too — but only for the service part. In NUNDINAE a service discount applies only to the service lines; materials and products stay at full price. So in payroll only the service total is reduced.
4. Work that never got invoiced
The most expensive mistake is the invisible one: the work was done, but no invoice was made. Then it isn't in turnover or in payroll, and by the end of the month nobody remembers what it was.
That's why in NUNDINAE the day locks once it's over — staff can no longer change yesterday's invoice, and whatever was left undone is corrected by a manager. If staff need time in the morning, the lock can be moved to, say, 10 am the next day. An invoice for a past day is no longer a quiet change but a manager's deliberate correction. Why this matters in a booking system at all is explained in booking system: what it needs to be able to do.
What the payroll report shows
For each staff member over the selected period (for example "Last month"):
| Column | Meaning |
|---|---|
| Customers | visits that included at least one service |
| Services incl. VAT | services total after the service discount |
| VAT | rate from the settings |
| Services excl. VAT | the basis for pay |
| Materials and products | for information, not counted towards pay |
Example: in a month a staff member did three visits, each with €75 of service + €25 of materials. Services including VAT come to €225, excluding VAT €181.45 (at Estonia's 24% rate). The €75 of materials is shown separately. The table downloads as CSV and opens in Excel.
The report counts both services sold at the till and visits invoiced from a booking. If the same booking was also sold at the till, it's counted once. A cancelled invoice and a cancellation fee don't count as services.
Other reports from the same database
Payroll is one report among many. Because the online store, the till and bookings are in the same application, the same place gives you:
- turnover by day (online store, till and booking invoices together);
- till payment methods;
- staff workload;
- new and returning customers, no-shows;
- most popular services and best-selling products;
- gift cards.
Every table can be sorted by column and downloaded as CSV. You don't have to stitch exports from three programs into one spreadsheet.
Who sees what
The payroll report is sensitive. In NUNDINAE viewing reports is a separate permission, given to the owner and the manager. Staff see their own day and their own customers, not their colleagues' pay.
If working out commission takes half a day every month in your business, see how NUNDINAE does it, or order NUNDINAE or ask for a demo using your own data.
