My injectors want commission. How do I keep that from wrecking my margins?
The first decision that matters is what the commission gets calculated on. A 40% commission on gross service revenue produces very different economics than 40% on revenue net of product cost. If a neurotoxin treatment charges $600 and your product cost is $200, paying 40% of gross means $240 to the injector, leaving $160 for everything else. Paying 40% of net means $160 to the injector, leaving you $240. Multiply that difference across hundreds of treatments monthly and you’re looking at the difference between a profitable med spa and one that struggles to cover rent.
Discounts matter too. If your injector runs a promotion or the patient uses a membership discount, does the commission calculate before or after the discount? Commissions on gross revenue before discounts can push provider pay above what you actually collected from the patient.
Once you have the base defined, track pay per provider and per service line. Not every injector produces the same margin, and not every treatment does either. Filler typically carries higher product cost than neurotoxin. A provider who does mostly filler at generous commission rates might generate impressive revenue numbers while producing thin margins. You need inventory and cost tracking that shows provider-level profitability, not just provider-level sales.
Review the numbers monthly. The injector everyone loves, the one with the fullest schedule, should also be generating real profit. If the math shows otherwise, you have a pricing problem, a commission structure problem, or a product cost problem. Your books should surface this before it compounds for months.
Worker classification carries serious stakes too. Many med spa owners prefer to treat providers as independent contractors for flexibility, but the IRS and state agencies apply specific tests. Getting this wrong means back taxes, penalties, and interest. Whether your providers are W-2 employees or 1099 contractors affects how you structure and pay commissions, and the classification needs to be defensible before you start paying.
Setting up commission-based payroll correctly from the start prevents errors that grow over time. Define the commission base in writing, configure your payroll system to calculate it accurately, and make sure your product cost tracking connects to those calculations. A CPA for medical businesses can help structure this so your compensation model works on paper and in practice.
If you’d like help getting commission structures and provider-level tracking set up correctly, book a consultation and we can review your situation.
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