Peter Lewis · FounderOctober 29, 20268 min read

How to read your year-end numbers: a P&L for stylists

A plain-English profit-and-loss walkthrough for booth renters and independents. Start with revenue, subtract the real costs, and see what you actually kept — build it from your own numbers.

Most stylists know their revenue. Ask what you made this year and you can probably get close — you have a rough feel for what came through the chair. Ask what you kept, and it gets quiet. Those are different numbers, and the gap between them is the whole point of a profit-and-loss statement.A P&L sounds like something that requires an accountant and a spreadsheet with tabs. It doesn't. At its core it's one honest subtraction problem: start with everything that came in, subtract everything that went out to earn it, and what's left is what you actually kept. This post walks the whole thing for a booth renter or solo independent, line by line, in plain English — so you can build yours from your own numbers and finally see the number that matters.The one-line versionBefore the details, here's the entire shape of a P&L. Everything after this is just filling in the lines:

The whole thing

Revenue (everything clients paid you) − Cost of goods (product, color, supplies you used on their hair) − Space (booth rent or commission split) − Processing fees (what the card networks took) − Business overhead (software, insurance, education, tools) − Taxes (income + self-employment) = What you actually kept

That last line is your real income. Not your revenue, not your deposits — the number that's yours after every cost of being in business. Let's build each line.Line 1: RevenueStart with everything clients paid you across the year: services, tips, retail if you sell it, gift cards that were redeemed (not sold — a sold-but-unredeemed card is money you still owe, not revenue). Your booking tool or your bank deposits give you the total.One honest catch for booth renters: if you sold gift cards in December that get redeemed the following year, be careful not to count the same work twice. Cash from a card sold last year, redeemed this year, is this year's revenue — the work happened this year. (We wrote up the gift-card timing trap separately: Gift cards without the January hangover.)Line 2: Cost of goods — the product on their hairThis is the color, developer, toner, foils, and back-bar product you physically used delivering services. It's the most-forgotten line for stylists, because you buy supplies in bulk in February and use them all year, so it never feels connected to a specific ticket.But it's a real cost of every color service, and if you don't subtract it you'll overstate what you kept. Add up what you spent on professional product and color across the year. For a color-heavy book it's meaningful; for a cut-focused book it's small. Either way, it's a line.Line 3: Space — booth rent or commissionWhere you work costs money, in one of two shapes:Booth rent: a flat monthly number. Twelve months of it, straight subtraction. Predictable and easy.Commission: a percentage of every service. If your salon takes 40%, then 40 cents of every service dollar never reaches you — subtract it here.For context on how these two structures compare at different revenue levels, the break-even math is its own post (Booth rent vs. commission). For the P&L, you just need this year's actual number: total rent paid, or total commission given up.Line 4: Processing fees — the quiet percentageEvery card tap took a small cut. Individually invisible; annually, a line item. The rates are public — for example, Square charges 2.6% + 15¢ on an in-person tap, 3.3% + 30¢ online, and 3.5% + 15¢ on a manually keyed or card-on-file charge (verified July 2026). Other processors are in the same neighborhood.The easy way to get this line: your processor's dashboard reports total fees for the year. Use the real figure if you have it. If you're estimating, apply your rate to your card volume — and remember the fixed per-transaction cents add up across a lot of tickets. (Full anatomy of the fee here: Credit card processing fees are eating your margin.)Line 5: Business overhead — everything else it takes to operateThe miscellaneous but real costs of running the business:Software (booking tool, any texting/POS/accounting subscriptions)Insurance (liability, and any business coverage)Education (classes, certifications, that color course you took)Tools and equipment (shears, dryers, the replacement that wasn't cheap)Marketing (anything you paid to get or keep clients)Miscellaneous (capes, towels, laundry, the little stuff)Individually small, collectively a real number. Total the year.Line 6: Taxes — the line stylists forget until AprilThis is the one that ruins otherwise-fine years. As a self-employed stylist you owe income tax and self-employment tax (Social Security + Medicare, the part an employer would normally cover). Combined, that's a meaningful bite out of your profit — which is exactly why setting money aside through the year matters (Quarterly taxes for stylists).Crucially, tax comes out of your profit, not your revenue — you're taxed on what's left after the business deductions above, not on everything clients paid. That's why building the P&L in order matters: the earlier lines lower the number you owe tax on. For a year-end read, use your actual set-aside or your accountant's figure. Don't skip the line just because it's unpleasant — an "I kept $X" number that ignores taxes is a fantasy you'll pay for in the spring.Putting it together: a fully illustrative exampleHere's the whole statement, start to finish, with illustrative numbers only — these are made up to show the structure, not measured averages. Your every line is different.

The math — illustrative only

Revenue: $84,000 (services + tips + retail for the year)− Product / color used: −$6,000 − Booth rent ($550/mo × 12): −$6,600 − Processing fees (~2.7% of card volume + per-txn): −$2,000 − Software / insurance / education / tools: −$3,400 − Taxes (income + self-employment, on the profit): −$16,000= What you actually kept: ≈ $50,000

Revenue (what came in)$84,000for the year
Total costs (product, rent, fees, overhead, tax)$34,000out the door
What you actually kept$50,000your real income

Illustrative numbers only — every line is invented to show the structure. Your revenue, product cost, rent, fees, overhead, and tax rate are all your own. The gap between the first bar and the last is the number worth knowing.

The story those three bars tell: the $84,000 you'd quote if someone asked "how'd you do this year" is not what you made. You kept roughly $50,000 of it. That's not a bad year — but it's a different number than revenue, and it's the only one that pays your mortgage. A stylist who confuses the first bar for the third is the one who feels broke in a "good" year.What the P&L tells you that revenue can'tOnce you've built it, the statement earns its keep by pointing at your levers:Which line is bigger than you thought? For most stylists it's taxes or processing fees — the two that hide. Seeing them sized correctly is the first payoff.Is your space cost proportional to your revenue? If booth rent or commission is eating a large share of what came in, that's the break-even question flashing at you. It may be right; it may be time to reconsider the structure.How does your "kept" number compare to the alternative? As a reference point, BLS reports a median wage of about $16.95/hour for employed hairdressers and cosmetologists (BLS OES, May 2024 data) — but note that figure explicitly excludes self-employed workers, so it's a floor for comparison, not a target. If your kept number, divided by your hours, lands well under that, the P&L just told you something a revenue figure never could. (Your true hourly is its own rabbit hole: Your true hourly rate behind the chair.)Where's the cheapest lever? Usually it's not cutting costs — it's the revenue line. Recovering cancellations, raising prices on cadence, and earning during color processing time all lift the top bar without touching the middle one, and the whole "kept" number moves with it. That's the frame behind The chair is the unit of economics.The bottom lineA P&L isn't accounting homework — it's the one document that answers "what did I actually make this year" honestly. Revenue in, real costs out, and the number left over is yours. Build it once from your own figures, in the order above, and you'll never again mistake a busy year for a profitable one. Do it every December, and each year you get a cleaner read on which lever is worth pulling next.ReferencesSquare. What are Square's fees? Square Support Center. squareup.com/help/us/en/article/5068-what-are-square-s-fees (verified July 2026)U.S. Bureau of Labor Statistics. Occupational Employment and Wage Statistics: Hairdressers, Hairstylists, and Cosmetologists (39-5012), May 2024. bls.gov/oes/current/oes395012.htmReading your bank statement like a stylist — the monthly habit that feeds the year-end P&L.Five numbers every stylist should track — the running metrics that make the P&L a five-minute job.Your true hourly rate behind the chair — turning the "kept" number into a per-hour reality check.The chair is the unit of economics — why every P&L line is worth translating back to the chair-hour.