Salon Tax Tips: Your Taxes Called. You Need SalonScale.

Another tax season has come and gone, and as a salon owner, you might be left wondering: Where did all my profit go?

You saw the money coming in. Your salon was full of clients. Business might have been better than ever! But when the dust settled, the numbers didn’t add up the way you expected. If that’s you, take a deep breath, you’re not alone. The good news? We’ve got some tax tips, so you can change the story for next year. And it starts with understanding your expenses.

Why Profits Seem Invisible

No matter how busy your salon is, if you’re not tracking the right expenses in the right way, your bottom line can quietly disappear. Many salon owners lump together costs that shouldn't be grouped, or worse, don't track them at all.

Let’s break this down.

Running a salon isn’t free (obvious, we know). From rent and utilities to marketing and salon softwares, these everyday costs are called operating (or fixed) expenses. 

But here's the thing, product costs are not operating expenses. They're part of your Cost of Goods Sold (COGS), and they should be treated differently in your accounting and tax reporting.

The Mistake That’s Costing Your Bottom Line

If you’re only tracking service revenue and not deducting the product costs associated with each service, your profit margin is artificially inflated—and so is your taxable income. That means you might be paying more in taxes than necessary, and it gives you a skewed view of how profitable your salon really is.

Products are a variable cost. They change from service to service, stylist to stylist. If you’re not tracking it separately, you’re not getting the real picture of what each service actually cost you.

A Smarter Way to See (and Save) Your Revenue

SalonScale is designed to help salon owners like you track the real cost of every service by separating out product usage from service revenue. When you know your COGS, your pricing becomes more accurate, your profit margins are protected, and your tax reporting gets a whole lot easier.

By using SalonScale, you can:

• Increase profitability on every session, with real-time product usage and cost calculations
• Streamline backbar management
• Simplified reports on your salons usage data by stylist, product, and color line

Operate Smarter, Not Harder

Understanding the difference between operating expenses, and cost of goods sold (COGS) is the key to unlocking real profitability. And you don’t have to be a financial wizard to get started. You just need the right tools.

Ready to improve your salon’s profitability and simplify your tax reporting?

Start your 14-day free trial of SalonScale!

Bonus: SalonSale is an operating expense, aka can be used as a write off for your salon!