Complete guide

How to price hair salon services: the cost-per-minute method, with examples

Quick answer: work out your cost per minute (all monthly costs, your own pay included, divided by the minutes actually charged to clients), multiply it by the length of the service, add the cost of products used, then your margin, and VAT if you are VAT-registered. Compare the result with local prices to fine-tune.

Many salons set prices by looking at the salon down the road. That helps you position yourself, but it does not tell you whether you make a living. The right method starts from your own figures: what one minute of work costs in your salon. Here is the calculation step by step, with a full example, then how to apply it to cuts, colour, packages and beard trims.

Key takeaways

  • Service price = time × cost per minute + products used + margin, then VAT if you are registered.
  • Cost per minute is based on minutes actually sold, not on opening hours.
  • Then compare with local prices: if you are far above, work on time or costs, not just on price.
  • Redo the calculation once a year, or whenever a big cost changes (rent, wages, supplier).
Updated 8 min read By the Voxtya team

How do you calculate the price of a hair service?

A price that is too low rarely shows straight away: the diary is full, clients are happy, but at the end of the month almost nothing is left. A price that is too high shows faster: empty slots. The cost-per-minute method finds the right price for your salon, with your costs.

All figures in this guide are worked examples. Redo them with your own numbers: a sheet of paper or a spreadsheet is enough.

Step 1: add up all your monthly costs

List everything the salon costs in a month, even if nobody works. Take the invented example of “Lumière Hair”, with the owner and one employed stylist:

Monthly costExample
Rent and service charge£1,200
Business rates (after any relief)£150
Employed stylist, including employer costs£2,300
Owner’s target pay£2,400
Energy and water£320
Insurance, bank fees, card reader£160
Accountant£120
Software, phone, internet£100
Towels, small equipment, cleaning£150
Loan repayment£400
Total£7,300

Two common traps: forgetting your own pay (“I pay myself with what is left”) and forgetting yearly costs (insurance paid once a year, equipment replacement). Divide them by 12 and add them to the month.

Technical products (colour, developer, treatments) are not in this table: you add them service by service, because a colour uses far more than a men’s cut.

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Step 2: count the minutes you actually sell

Do not divide costs by opening hours, but by the minutes when a stylist is working on a paying client. The rest (reception, cleaning, ordering, gaps in the diary) is real, but it is not sold: it has to be paid for by the minutes that are.

In the example, two people work 35 hours a week, 46 weeks a year (holidays and training removed):

  • Hours present per person per month: 35 × 46 ÷ 12 ≈ 134 hours
  • Realistic occupancy: 70% (a diary is never 100% full)
  • Hours sold per person: 134 × 0.70 ≈ 94 hours, or 5,640 minutes
  • For both: 11,280 minutes sold per month
Your occupancy rate is in your diary: over a month, add up the booked minutes and divide by the minutes present. When you open, start with a cautious rate (50 to 60%), then adjust with real figures.

Step 3: work out your cost per minute

Cost per minute = monthly costs ÷ minutes sold.

In the example: £7,300 ÷ 11,280 minutes ≈ £0.65 per minute, about £39 per hour sold.

This is your floor: below it, every minute worked loses money. It changes when occupancy changes: at 80% instead of 70%, the same costs give £7,300 ÷ 12,880 ≈ £0.57 per minute. Filling the diary lowers your cost without touching prices.

OccupancyMinutes sold (2 people)Example cost per minute
50%8,050£0.91
60%9,660£0.76
70%11,280£0.65
80%12,880£0.57

Step 4: price each service, with examples

Price before VAT = (time × cost per minute) + products + margin. If you are VAT-registered, add 20% VAT on top.

The margin (calculations of this kind often use 10 to 20%, the choice is yours) pays for investment, a quiet month and a reserve. In the example we use 15% and a cost per minute of £0.65.

ServiceTimeTime × £0.65Products+15%Price
Men’s cut30 min£19.50£0.50£3.00£23.00
Wash, cut and blow-dry60 min£39.00£2.00£6.15£47.15
Root colour and blow-dry90 min£58.50£7.00£9.83£75.33
Balayage, cut and blow-dry150 min£97.50£13.00£16.58£127.08
Beard trim20 min£13.00£0.50£2.03£15.53

Then round to a clear price (£23, £47, £75…). If you are VAT-registered, these become £27.60, £56.58 and so on before rounding. Times include development time: while a colour develops, the stylist can do a men’s cut. If that often happens in your salon, you can count only the “active” time on colour services and be more competitive.

VAT

You must register for VAT when your taxable turnover goes over £90,000 in the last 12 months, or is expected to in the next 30 days (GOV.UK). If you are close, build VAT into your price plan now: adding 20% overnight is much harder than planning for it.

Step 5: compare with local salons and adjust

The calculation gives your floor price. Now compare it with nearby salons: their prices are usually at reception and online. Note the 5 or 6 main services of 4 or 5 salons.

  • Your calculated price is close to the local average: fine, round it and align
  • It is clearly above: look where to act. Time (a cut in 45 minutes rather than 60?), occupancy (empty Tuesday slots?), a heavy cost? Or own a more premium position, with service that backs it up
  • It is clearly below: you may be leaving money on the table. A well-rated salon with many reviews can sit slightly above the area

What justifies a higher price to clients: a proper consultation, consistent results, a pleasant salon, recent and numerous reviews. A 4.8 rating with 150 reviews reassures more than a low price. Our guide to Google reviews for hair salons shows how to get there.

Packages, long hair and short services: good practice

Packages

A package (“colour, cut and blow-dry”) makes choosing easier. Price it as the sum of the services, then give a small discount if you wish, and say clearly what is included.

Long or thick hair: plan a supplement

Colour on very long hair uses twice the product and time. Rather than one price, show a “short / medium” price and a clear supplement for long hair. Clients know what to expect before they sit down.

Price by service, not by person

Base prices on the time and products of the service rather than on who the client is: a 30-minute short cut takes the same time whoever is in the chair. More and more salons now price by length and technique, which is fairer and easier to read.

Very short services

A fringe trim takes 10 minutes but often blocks a 15 to 20-minute slot. Set a minimum price that reflects the slot.

The 6 most common pricing mistakes in salons

  1. Copying the salon next door without doing your own sums: their rent, costs and team are not yours.
  2. Forgetting your own pay: a salon that only “ticks over” without paying its owner is not profitable, it is being subsidised by the owner.
  3. Underestimating time: time your services for two weeks. The gap with the “theoretical” time often surprises.
  4. Giving away too many small extras: free treatment, free fringe trim, free mask… Each free gesture costs product and minutes.
  5. Never raising prices: costs rise every year, prices must follow in small steps.
  6. Showing “from” prices that are too low: the client discovers a very different final bill and feels tricked. Prefer prices by hair length, clear from the start.

When and how to review your prices

Redo the calculation at least once a year, and whenever a big cost changes: rent review, a new hire, a supplier price rise. A small regular increase goes down far better than a big one after three years of standing still.

  • Tell clients at least a month ahead, with a notice at reception and a message
  • Explain without over-justifying: one sentence is enough
  • Update reception, your website and online booking at the same time

Dear clients, from [date] our prices will change slightly to keep up with rising costs and keep using quality products. The new prices are at reception and online. Thank you for your loyalty, the whole team at [Salon name].

For more wording and the right timing, see our guide to announcing a price increase. With Voxtya online booking, the price and length of each service are changed once and shown to clients when they book.

The steps at a glance

The cost-per-minute method in five steps.

  1. Add up monthly costs. Rent, rates, wages, your own pay, energy, insurance, accountant, loan, yearly costs divided by 12.
  2. Count minutes sold. Hours present × realistic occupancy, in minutes.
  3. Work out cost per minute. Monthly costs divided by minutes sold.
  4. Price each service. Time × cost per minute + products + margin, then VAT if registered.
  5. Compare and adjust. Local prices, rounding, and a review at least once a year.

This guide for your trade

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Go further

Sources

The rules quoted in this guide come from these official pages, checked on October 28, 2026.

How do you work out the price of a haircut?
Multiply the length of the cut by your cost per minute, add the products used and your margin, then VAT if you are registered. In our example, a 30-minute men’s cut comes to £23 before VAT.
What is cost per minute in a salon?
It is what one minute of sold work costs in your salon: all monthly costs, wages and your own pay included, divided by the minutes actually charged to clients.
What margin should a salon add?
It is a business choice. Many calculations of this kind use 10 to 20%, enough to absorb a quiet month and invest. The key is to have included your own pay in the costs first.
Should salon prices include VAT?
Prices shown to consumers should be the price they actually pay. If you are VAT-registered, that means VAT included.
Can a salon charge different prices for men and women?
The fairest approach is to price by time and technique (length, colour, short or long cut) rather than by who the client is. It also makes your price list easier to read.
How often should a salon raise its prices?
Redo the calculation once a year and whenever a big cost changes. Small, regular increases are accepted better than a large one after several years.
My calculated prices are higher than nearby salons. What now?
First reduce time or fill empty slots: higher occupancy lowers your cost per minute. Otherwise, own a premium position with service and reviews that justify it.
How should I price a package?
Add up the services it contains, then give a small discount if you want, and state clearly what is included.
Should I charge for colour development time?
If you cannot do anything else during development, yes. If you do another service at the same time, you can count only active time and price colour more competitively.
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