What is a Hairdresser Rent A Chair Agreement?
A Hairdresser Rent A Chair Agreement (also known as a Salon Licence Agreement or Salon Booth Rental 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 to rent a chair for hairdressing?
Yes, we definitely recommend you use a proper contract if you’re renting out a chair for hairdressing.
It’s really important to manage a hairdressing rent a chair agreement 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 Hairdresser Rent A Chair Agreement cover?
Our Hairdresser Rent A Chair Agreement template includes:
★ Licence Fees – will you charge a set Licence Fee (weekly/monthly), a percentage of takings, or a combination of both?
★ Bond – the amount you will charge as a security deposit
★ Term of Agreement – month to month or a fixed term (e.g. 12 months)
★ Permitted Use – the services they are allowed to carry out at your salon
★ Access and Hours of Work – can they work whenever they want, or only during your salon opening hours?
★ Signage – rules for signage
★ Insurance – what insurances do you require the contractor to have and maintain?
★ Operating Expenses – are charges for cleaning, electricity and other utilities included?
★ Responsibilities – use of the Premises and associated obligations
★ Inclusions – what does the ‘chair’ include? Appropriate workstation including mirror, counter, plug points, access to sinks and storeroom etc.
★ Termination – how can either party terminate the agreement?
★ Dispute Resolution – process to deal with disputes
How much does it cost to rent a chair in a salon?
There a few different ways you can charge for renting a chair in a salon:
- Fixed Rent – the stylist pays a set amount per day/week/month
- Percentage Commission – the salon owner takes a cut of the stylist’s total revenue from clients (usually around 40-60%)
- Combination – the salon charges both fixed rent AND a percentage of revenue from the stylist.
We have included all of these options in our template. 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, as they are operating a separate business.
Can I still use this template if I’m not a hairdresser?
Yes, Rent A Chair Agreements are also very common in barber shops, beauty salons, nail salons, day spas and tattoo studios. You can use this Rent A Chair contract template for those businesses as well.
How much should I charge for the Bond and Licence Fee?
You can choose the amount you want to charge, this is a commercial decision for you to make. The amount can depend on the location of the salon, how much revenue you are generating and other factors like how often the chair will be used.
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
🔸 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 need to register for a Tax File Number (TFN), Australian Business Number (ABN) and in certain circumstances you 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.
Is this Hairdresser Rent A Chair Agreement template legally binding?
All of our templates have been drafted by qualified Australian lawyers who hold an Australian legal practicing certificate.
We are affiliated with a commercial law firm based in Sydney.