What is a Hairdresser Rent A Chair Agreement?
A Hairdresser Rent A Chair Agreement (also known as a Salon Rent A Chair Agreement) is a contract to rent out a chair in your salon to a freelancer, such as another hairdresser, beauty therapist or masseuse.
The freelancer is self-employed and runs their own business. As an independent contractor, they have their own clients, set their own hours and provide their own equipment. They pay a Licence Fee to the salon in exchange for use of the premises.
Do I need a contract?
Yes, we definitely recommend you use a proper contract if you’re renting out a chair!
It’s really important to manage a rent a chair arrangement properly so that you protect your salon, your clients and your reputation.
Fair Work conducts inspections into Rent A Chair arrangements on a regular basis to make sure that they aren’t sham contracting arrangements. Sham contracting is hiring someone as a contractor when they should be an employee. If you’re convicted of sham contracting, you could be hit with a fine of up to $12,600.
Setting out clear guidelines in a contract will make things easier for you, and your freelancers.
We recommend you also download and keep a copy of this fact sheet from Fair Work before you get started so you understand the key differences between an independent contractor and an employee.
What does the Rent A Chair Contract cover?
This Rent A Chair Contract template includes:
★ Licence Fees
★ Bond
★ Term of Agreement
★ Permitted Use
★ Access and Hours of Work
★ Signage
★ Insurance
★ Operating Expenses
★ Responsibilities
★ Inclusions
★ Termination
Can I choose if I want to charge the Licence Fee as a daily amount, or a percentage of revenue?
Yes, you can! We have included both options in the contract. You just need to choose the one you want to use.
How do payments get processed?
A freelancer should always have their own payment facilities to take payments directly (such as a Square Card Reader or EFTPOS machine).
From a legal point of view, it’s important to have separate bank accounts and payment records.
Can I still use this template if I’m not a hairdresser?
Yes, this Rent A Chair Agreement is suitable to rent a chair in hair salons, beauty salons, nail salons, day spas, barber shops and tattoo studios.
Differences between an employee and a contractor
Whether you are an employee or a contractor depends on many different factors.
Independent contractors generally:
🔹 work for themselves and are their own boss
🔹 are free to accept or refuse work
🔹 control their own working times
🔹 provide their own tools and equipment
Employees generally:
🔸 work in someone else’s business
🔸 are subject to controls on how, where and when they do their work
🔸 are paid a wage
🔸 receive employee entitlements, such as sick and annual leave
Any other requirements?
Contractors are self-employed individuals or companies. To legally operate as a contractor in Australia you will need to register for a Tax File Number (TFN), Australian Business Number (ABN) and in certain circumstances you will need to register for Goods and Services Tax (GST).
Still not sure about the difference?
We recommend you visit the Fair Work Ombudsman website to read more. If you’re an employer, visit the ATO’s website to learn the tax and super obligations for both employees and contractors, and read more about the differences between them.
What is sham contracting?
A sham contracting arrangement is when an employer attempts to disguise an employment relationship as an independent contracting arrangement. This is usually done to avoid paying employee entitlements. Even if you make an innocent mistake, you can still be fined!
If you’re convicted of sham contracting, you could be hit with a fine of up to $12,600 as well as back-payment of wages and entitlements.
This agreement makes it crystal clear that you have a true Independent Contractor arrangement.
