Accounting for a Beauty Salon: What to Keep in Mind

Taxes for the salon and its stylists

• a salon with income of up to UZS 1 billion — turnover tax of 4% (the general rate for services, Article 467 of the Tax Code); above the threshold — VAT and profit tax;
• a stylist on an employment contract — personal income tax (PIT) of 12% (Article 381) and social tax of 12% (Article 405);
• a stylist registered as an individual entrepreneur (IE) or self-employed — turnover tax of 1%, paid by the stylist themselves (Article 467).

Accounting areas in a salon

Revenue from services and sales of related products, consumables, rent, settlements with stylists and administrators.

Separately — cash transactions and clients' card payments, which must reconcile with the accounting records.

• revenue from services and products
• materials used in treatments
• rent and utilities
• settlements with stylists
• cash and card transactions

Settlements with stylists

Arrangements vary: an employment contract, a share of revenue, chair rental. The chosen model determines both the paperwork and the tax consequences.

Mixing arrangements without proper documentation is the most common reason for questions during a tax audit.

Materials and cost

Consumables are written off based on the services actually provided. Without usage norms it is impossible to know the real cost of a treatment.

Regular stock counts help spot discrepancies in time.

Why salon revenue is more complex than it seems

Income arrives through several streams: services, sales of home-care products, packages and gift cards. Each stream is recorded in its own way and needs to be reconciled separately.

Gift cards and packages require particular care: the money is received in advance, the service is provided later, and this affects revenue recognition.

• payment for services in cash and by card
• sales of retail products
• gift cards
• packages and treatment bundles
• refunds and cancelled bookings

Consumables and usage norms

Materials in a salon are used in small portions, so without write-off norms the records quickly drift away from reality. The difference builds up quietly and becomes visible only at a stock count.

Documented norms per treatment solve two problems at once: they provide grounds for the write-off and make it possible to calculate the real cost of a service.

Agreeing terms with stylists

Stylists' pay most often depends on output, and the forms of cooperation vary. The chosen form determines both the documentation and how settlements are made.

Terms should be put in writing before work begins. Verbal agreements on percentages are the most common source of conflicts and claims in this field.

What to prepare to set up the accounting

We need the service price list, data from the booking and cash systems, purchase documents for materials and information on the stylists' terms of work.

This data shows which treatments are genuinely profitable and which are kept afloat only by client traffic while eating up materials.

How a single salon differs from a chain

A single salon has a simple setup: revenue, materials, stylists. A chain adds transfers of materials between locations and a comparison of results for each of them.

In both cases the main task is the same — to see the cost of each service, not just the day's cash total.

What owners most often overlook

The most common gap is the lack of a link between the client booking, the cash transaction and the write-off of materials. Until these three events match up, real profitability is unknown.

The second is paying for purchases with the owner's personal card without documenting it afterwards. Such expenses fall out of the books and distort the cost of services.

How we help

We keep the books for salons and studios, help choose an arrangement for working with stylists and keep reporting on schedule.

Leader Audit is an audit firm with 13 years of practice and more than 220 audits completed.