Provider pay is usually a med spa's largest cost. The way you structure it affects not just how much you spend, but which treatments get recommended, how product is used and how much risk the clinic carries in a slow month. There is no perfect model, but each one has clear trade-offs.
Hourly or salary
How it works: providers are paid for time, regardless of revenue.
Pros: predictable pay for the provider; clinic keeps more margin from very busy providers.
Cons: the clinic carries the cost of quiet days and empty schedules. There is little direct link between pay and productivity.
Best when: demand is steady and schedules are consistently full, or for newer providers building a book.
Commission on revenue
How it works: providers earn a percentage of the revenue they generate.
Pros: cost moves with revenue, so slow months cost less. Providers are motivated to fill their schedule.
Cons: it ignores product cost. A provider earns the same on a high-product service as on a low-product one, and discounts reduce their pay, which can create tension.
Commission on margin
How it works: commission is calculated on revenue minus product cost.
Pros: aligns provider incentives with clinic profit and discourages waste.
Cons: more complex to calculate and explain. Requires accurate product cost per treatment.
Hybrid: base plus commission
How it works: a base hourly rate or salary plus commission above a threshold.
Pros: gives providers security while rewarding productivity. The threshold can be set so the clinic covers the base before commission begins.
Cons: needs careful design so the threshold is fair and achievable.
Questions to ask about any model
- What does this provider cost the clinic in a slow month?
- Does the plan reward recommending the right treatment, or the most expensive one?
- How do discounts, memberships and touch-ups affect provider pay?
- Is total provider pay, including payroll taxes, sustainable as a share of revenue?
Model it before you change it
Take last quarter's actual data and calculate what each provider would have earned under the current plan and the proposed one. Look at the clinic's contribution margin under both. Changing compensation affects people's income, so involve providers early, explain the reasoning and check employment law requirements with an advisor.
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