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Do Commission Workers Get the Minimum Wage?

If you're an employee paid by commission, yes — and it's checked one week at a time.

Updated 24 Sept 2026

Under the federal Fair Labor Standards Act, an employee paid wholly or partly by commission must still receive at least the minimum wage ($7.25 an hour federally) for every hour worked, checked each workweek on its own. If commission plus any base pay comes to less, the employer owes the difference for that week. Independent contractors, including booth renters, aren't covered, and state law can set a higher rate.

What does this mean for you? Work out your own number: Commission minimum wage calculator

A common salon arrangement is “you keep 40% of what you bring in.” It sounds like a rate, not a wage, and people often assume that if the week was slow, the pay was just slow. For an employee, that isn’t how the law works: commission is a way of paying wages, and the wages still have to add up to a floor.

The floor is per week

The federal minimum wage is $7.25 an hour. For an employee, take the week’s pay — commission plus any base pay — and compare it with hours worked × the minimum wage. If pay is lower, the employer owes the difference.

The Department of Labor’s guidance is that each workweek stands alone: there is no averaging of two or more weeks. A $200 commission week on 40 hours is $90 short of a $7.25 floor, and a big week afterwards doesn’t cancel that. Employers who pay commission monthly still have to work out the weekly position.

Check your own week with the commission minimum wage calculator.

Where tips fit in

Without a tip credit, the employer pays the full minimum wage itself, so tips are on top and don’t count toward it. With a tip credit, the employer pays a lower cash wage (at least $2.13 an hour federally) and counts tips toward the rest — but only up to the credit, only if the employee was told, and only if the employee keeps all their tips. If tips fall short of the credit, the employer makes up the rest.

Who this doesn’t cover

  • True independent contractors, including people who rent a chair or booth and keep their own clients and earnings. What matters is the real working relationship — who controls the work, the prices, the schedule and the equipment — not what the agreement is called.
  • Businesses outside federal coverage. Very small businesses can fall outside the federal law, in which case state law is what applies.

What this doesn’t settle

Overtime is separate — over 40 hours a week different rules apply, and some commissioned employees at retail and service businesses can be exempt from overtime under a specific test. And state law can be stricter than the federal floor: a higher minimum wage, a smaller tip credit, or rules on how commission pay must be structured, as in California’s salon commission rule. Where state and federal rules differ, the one more protective of the employee applies.

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