TN 7 (08-10)

RS 02101.092 Employment Status of Barbers


IRS Revenue Rulings 57-110 and 70-488

A. Employee status of barbers

Some barbers work as employees of shop owners on a salary basis, and generally there is no question about their employment status. For instance, barbers who perform services under a lease agreement in a barbershop that has the right to direct and control the way they perform their services are employees of the shop. However, some barbers work under percentage agreements, which may raise questions about their services.

Under the typical percentage agreement, a shop owner provides the barber with a space or chair. The barber furnishes razors, combs, scissors, and sometimes uniforms, but the owner provides all other equipment and supplies. Barbers work with other barbers in the shop. To consider the space and facilities the owner furnishes, the barber agrees to let the owner retain a certain percentage of the earnings, except for tips. Either party may terminate the relationship on short notice. The owner may terminate the relationship if the barber fails to conform to the provisions of the agreement or the shop rules concerning work hours, uniforms, smoking, wasting time, etc.

The barber's union and shop owners may impose the shop rules. The barber does not advertise, and the barber's name does not appear in the title of the shop. Those who work under such agreements, or under substantially similar conditions, are employees.

Factors that may indicate when a barber is an employee:

  • the barber does not handle his or her sales receipts;

  • the barber does not make his or her appointments;

  • the barber has a required work schedule or hours;

  • the barber must wear a uniform;

  • the owner provides towels or smocks; and

  • the owner provides training.

B. Independent contractor status of barbers

After serving apprenticeships and gaining experience, many barbers set up their own shops and establish a personal following. They usually rent a shop or use a room in their own homes; install a barber chair, the necessary tools, equipment, and materials; and make themselves available to the public to perform services such as haircuts, shaves, shampoos, scalp treatments, and facial massages. Quite often, they install two or more chairs in their shops and hire other barbers to help them, either as employees or under rental arrangements. These shop owners are clearly independent contractors.

Other barbers work independently under agreements whereby they rent a barber chair from a shop owner for a flat sum (per week or month). They usually work full time, but are not required to do so. However, they generally try to arrange their absence from the barbershop to occur when the shop owner is present. They may set their own prices or abide by union standards, and they keep the entire amount of earnings. They use their own tools, but often the shop owners provide linens and other supplies. The shop owners do not require the barbers to abide by the rules and regulations. Either party may terminate the relationship on short notice. They are responsible only for themselves and work when they please.

A barber may be an independent contractor when he or she:

  • has a key to the shop;

  • buys their own products;

  • sets their own work schedule; and

  • has their own business phone number.

C. Principal factors indicating an employment relationship

The principal factors that indicate an employment relationship are:

  • the employer furnishes facilities and equipment to the barber;

  • the barber receives payment of an hourly wage or salary, or on the basis of a percentage of the receipts taken in;

  • the right of each party to terminate the relationship at any time without being legally responsible for damage;

  • the barber is restricted on hiring a helper or substitute;

  • the barber lacks business expenses and investments; and

  • the barber integrates his or her services into another business.

Consider the other factors in RS 02101.030 - RS 02101.068. They are less important than those above because of traditional customs and general practices in this field. For example, barber associations and unions may set prices and hours of work. Employees and independent contractors need a license to operate. The State or city health departments prescribe rules with respect to sanitary conditions. In addition, most barbers have their own tools and uniforms, regardless of whether they are employees or independent contractors.

D. Reference

IRS Publication 3518, Beauty and Barbering Industry Federal Tax Guidelines at

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RS 02101.092 - Employment Status of Barbers - 08/17/2010
Batch run: 07/03/2014