Home › Guides › Booth Rental vs. Suite Rental vs. Commission: The Real Differences
If you're leaving a commission chair to work for yourself, these three arrangements decide how much you control, what you pay, and who is responsible for the license. Here's how they actually differ.
There are three common ways to work behind the chair, and they sit on a spectrum from least to most independent. Commission means you're typically an employee of the salon: the owner sets your prices and schedule, provides the space and often the products, and pays you a percentage of what you bring in. Booth rental (also called chair rental or station rental) means you rent a spot inside someone else's salon and run your own small business from it. Suite rental means you rent a private, usually lockable room, often in a suite building like Sola or My Salon Suite, and operate as your own independent brand.
The jump from commission to either kind of rental is the big one. On commission you are usually working in a business. As a booth or suite renter, you are the business. Booth and suite rental are close cousins; the main differences between them are privacy, price, and how much of a standalone shop you're running.
Commission gives you the least control and the most support. The salon owns the client relationship, sets pricing and hours, handles booking and front-desk, and usually stocks the back bar. You trade a share of your revenue for not having to run anything.
Booth rental flips that. You set your own prices and hours, choose your own products, book your own clients, and keep what you earn after rent. In return you're responsible for your own supplies, your own marketing, and your own bookkeeping. Suite rental takes independence further: a private room, your own décor and retail, control over who comes and goes, and often the ability to set your own hours entirely. It usually costs more, which is the tradeoff for that privacy and control.
Two different licenses are in play, and it's easy to confuse them. The first is your individual practitioner license (cosmetologist, nail tech, esthetician, and so on). You always hold that yourself, in every arrangement. The second is the establishment license (sometimes called a salon, shop, or facility license) that covers the physical location.
On commission, the salon owner holds the establishment license and is responsible for the premises passing inspection. As a renter, this is where it gets state-specific. In some states the salon's establishment license covers everyone working under that roof, so a booth renter needs only their individual license. In other states, each independent renter must hold their own booth-rental or independent-station license, and a suite may be treated as its own establishment that needs its own license and its own inspection. Whether an inspection is required, and who it falls on, also varies.
Because this genuinely differs from state to state, don't assume what a friend in another state told you applies to you. Check your state's requirements page before you sign a rental agreement, so you know exactly which licenses and inspections are on you.
This is one of the clearest dividing lines. A commission stylist is normally a W-2 employee: the salon withholds income tax, pays half of your Social Security and Medicare, and hands you a W-2 at year end. Booth and suite renters are independent contractors who receive a 1099 (or simply their own business income), with no taxes withheld.
As an independent contractor you're responsible for your own income tax plus self-employment tax (the full Social Security and Medicare share), usually paid through quarterly estimated payments to the IRS and your state. You'll also track business expenses like rent, supplies, and insurance, which can offset that income. A word of caution: some salons label workers '1099' while still controlling their hours, pricing, and methods. Worker classification is a legal test based on how much control the salon has, not just what the paperwork says, so if the setup feels like employment, it may be misclassification worth asking about.
This is general information, not tax advice. A bookkeeper or accountant who knows beauty businesses is worth the fee, especially in your first independent year.
Commission has no upfront cost to you; you simply earn a smaller percentage. Renting means paying rent whether or not you're fully booked, so your break-even math matters. Booth rent is generally lower than suite rent, and suites bundle in more (private room, sometimes utilities, laundry, or booking software), which is part of why they cost more.
One cost surprises a lot of new renters: whether your rent itself is subject to sales tax. This varies by state. In some states, renting a booth or suite is treated as a taxable transaction, and either you or your landlord must collect and remit sales tax on the rent. In others it isn't taxed at all. On top of that, whether you must collect sales tax on the products you retail to clients, and sometimes on services, is its own state-by-state question. Getting this wrong can mean back taxes and penalties, so it's worth confirming before your first month.
Check your state's page for the specifics on licensing and inspections, and confirm the tax questions directly with your state's revenue or taxation department. The state board and the revenue department are two different offices, and you'll likely need both.
There's no single right answer; there's the right answer for where you are. If you're newer, still building a client base, or you value predictability, commission can be a smart place to grow with less risk. If you have a loyal following and want to keep more of what you earn and run things your way, booth rental is the natural first step into independence. If you want full privacy, your own brand, and room to sell retail, and the numbers work, a suite may be the better fit.
Whatever you choose, do the boring parts before you commit: read the rental agreement closely, confirm which licenses and inspections fall on you, set aside money for quarterly taxes, and verify the sales-tax rules for rent and retail in your state. This article is general information, not legal or tax advice. Confirm the specifics with your state cosmetology board and your state revenue department so your independent start is built on solid ground.
Commission means you're usually a W-2 employee with the salon in control; booth and suite rental make you an independent 1099 business owner with more freedom and more responsibility. The details that decide your compliance and cost, especially whether you need your own establishment license and whether your rent is subject to sales tax, vary by state, so confirm both with your state board and revenue department before you sign.
Whether you need your own license, the fees, the inspection rule and how your rent is taxed are all set by your state. Pick yours and get one clear, dated kit — free.
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