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Medical Spa and Spa Compensation Programs

By: Bryan Durocher
Posted: December 18, 2008

page 6 of 8

Profit sharing is an excellent benefit because it also motivates the staff to be more productive and reduces waste. It encourages team members to take an ownership attitude toward the business since they have a direct stake in the bottom line. An example of a profit sharing plan is 10% of the net profits after all expenses are paid. This could be distributed monthly or as a year-end bonus. This would apply to team members who have completed a year of employment or more. The profit sharing bonus would only be eligible to employees who are currently working for the organization. If a staff member were to leave during the course of the year, they would not be eligible. Staff receive a percentage of net profits based on hours worked. Total net monthly profit after expenses example: $10,260 for one month of sales. Team members receive 10% total of net profits=$1,026. The commission is split between team members based upon hours worked. Suppose 437 work hours are divided between three team members: one at 160 hours, one at 150 hours and one at 127 hours. Divide total hours into the commission; 437 hours divided into $1,026=2.35

Multiply each team member’s hours by the divided amount

Example: 160 hours x 2.35 = $376

150 hours x 2.35 = $352.50

127 hours x 2.35 = $298.45