How Much in Taxes Do Hairdressers Pay?

The tax landscape for hairdressers and stylists involves unique considerations stemming from diverse income streams and work arrangements. Navigating tax obligations requires a clear understanding of how your professional role is classified, what constitutes taxable income, and which expenses can be claimed.

Determining Your Employment Status

Your tax obligations as a hairdresser are shaped by your employment classification: either a W-2 employee or a 1099 independent contractor. This distinction dictates how your taxes are handled. The classification hinges on the degree of control a salon has over your work; if the salon dictates your hours, sets prices, and provides tools, you are likely an employee. You will receive a Form W-2 detailing your earnings and the taxes your employer has already withheld.

Conversely, if you operate with more autonomy by renting a booth, setting your own schedule, and purchasing your own supplies, you are considered an independent contractor. This status means you are running your own business. You will receive a Form 1099-NEC from any salon that paid you $600 or more during the year. Unlike an employee, no taxes are withheld, making you responsible for paying your income and self-employment taxes.

The primary tax difference lies in handling Social Security and Medicare taxes. For a W-2 employee, the employer pays half of these taxes, and the other half is deducted from your paycheck. As an independent contractor, you are responsible for the entire amount through the self-employment tax. However, you can deduct the employer-equivalent portion of your self-employment tax, which helps lower your overall tax bill even if you do not itemize.

Identifying and Tracking All Income

Accurate tax filing begins with tracking every dollar you earn from all sources, as it is generally taxable. The most straightforward income is the wages or commission paid by a salon to a W-2 employee. For independent contractors, this corresponds to service fees collected from clients or paid by the salon where you rent a booth.

A significant portion of a stylist’s income is derived from tips. The law requires that all tips—whether received in cash, via credit card, or through electronic payment apps—be included in your taxable income. If you are a W-2 employee receiving more than $20 in tips in a given month, you are required to report that total to your employer for tax withholding purposes.

Many stylists also generate income by selling hair care products to their clients, and the profits from these sales are taxable. For self-employed stylists, keeping detailed records of all income is necessary. Using a dedicated business bank account or accounting software can help ensure you have an accurate record of your earnings from services, tips, and product sales.

Common Tax Deductions for Hairdressers

For self-employed hairdressers, business expenses that are both “ordinary and necessary” for your trade can be deducted from your gross income, lowering your tax liability. An ordinary expense is one that is common in the hairstyling industry, while a necessary expense is helpful for your business. Keeping meticulous records and receipts for these expenditures is necessary to substantiate your claims.

Some of the largest and most common deductions for self-employed stylists include:

• Supplies used daily, such as shampoo, conditioner, hair color, and foils.
• Tools and equipment, including hairdryers, clippers, and curling irons. For expensive items expected to last more than a year, you may need to depreciate the cost over time, but special provisions often allow for deducting the full cost in the year of purchase.
• Booth or chair rental fees.
• State licensing fees and tuition for continuing education or skill-enhancing workshops.
• Professional liability insurance premiums.
• Advertising costs for business cards or a website.
• Bank fees for a dedicated business account.
• Uniforms or smocks, if they are required for work and not suitable for everyday wear.

Calculating and Paying Your Taxes

For independent contractors, the process begins with determining your net earnings by subtracting total business deductions from your total income. Your self-employment tax, which covers Social Security and Medicare, is then calculated on 92.35% of these net earnings. The self-employment tax rate is composed of a 12.4% Social Security tax, which for 2025 applies to the first $176,100 of earnings, and a 2.9% Medicare tax on all net earnings. This tax is paid in addition to your regular federal income tax, and some high-income earners may also owe an Additional Medicare Tax.

Because no taxes are withheld from your income during the year, you are required to pay these taxes in installments. These payments, known as estimated quarterly taxes, are made using Form 1040-ES. The payments are due on April 15, June 15, September 15, and January 15 of the following year, which helps you avoid a large tax bill and potential underpayment penalties.

For hairdressers classified as W-2 employees, the process is more straightforward. Your employer withholds federal income tax, as well as your share of Social Security and Medicare taxes, directly from each paycheck. This withholding is based on the information you provide on your Form W-4.