How to price a haircut: the four-input formula salons under-use.

A haircut should be priced on four inputs: chair time, stylist hourly rate, product COGS, and an overhead slice for rent, utilities and reception. Sum those, then add a target EBIT margin between 18% and 25%. Most salons skip overhead and undercount chair time — which is why margins drift down 4-7 points a year without anyone noticing. For the wider operating frame, start with the salon profitability guide.

The four inputs

The formula is simple to state, harder to land:

Price = (Chair time × Stylist rate) + Product COGS + Overhead slice + Target margin

Two of those inputs are usually wrong in salon pricing, and they're the same two every time: chair time gets undercounted (the consultation and the wash and the blow-dry all "don't really count") and overhead doesn't make it into the formula at all. Below, the four inputs for a women's cut at a boutique salon in Hamburg.

Input 1 — Chair time

Total chair time, door to door. For a standard women's cut: 5 minutes consultation, 10 minutes wash, 25 minutes cut, 15 minutes blow-dry, 5 minutes payment and rebooking. Total: 60 minutes of chair occupancy.

That's the number that matters — not the 25 minutes of scissors. The chair is occupied for an hour; it can't be booked for anyone else in that window. Price for the hour.

Input 2 — Stylist hourly rate

Gross hourly cost to the salon, not the take-home. For a mid-level stylist in Hamburg on €2.600 gross/month plus 30% employer social charges, the loaded hourly cost is roughly:

Note the utilisation figure. A stylist isn't at the chair eight hours a day — there's setup, cleanup, gaps between bookings, walk-ins that don't convert. Realistic productive utilisation is 70-80% in a healthy salon. Use 75% as the default and adjust from your own booking data — the chair utilisation rate glossary covers how the figure is defined and where it usually sits.

Input 3 — Product COGS

Shampoo, conditioner, styling product, towels (laundering cost), the disposable cape. For a women's cut + wash + blow-dry, this typically lands at €1,80-€2,40. Worked example:

• Shampoo, 15ml at €0,06/ml: €0,90
• Conditioner, 10ml at €0,08/ml: €0,80
• Styling product, 5ml at €0,12/ml: €0,60
• Towel laundering (2 towels at €0,15): €0,30
• Disposable cape, neck strip: €0,10

Product COGS total: €2,70. Small line, but it adds up — €2,70 × 8 cuts/day × 22 days = €475/month in product. If you're not tracking it, it lives in the "miscellaneous supplies" line and you have no idea what each service actually consumes.

Input 4 — Overhead slice

Rent, utilities, reception salary, insurance, software, the espresso machine for clients. For a four-chair salon in Hamburg with €4.800/month total fixed overhead, working 22 days × 4 chairs × 6 productive hours = 528 chair-hours per month. Overhead per chair-hour: €9,10.

For a 60-minute women's cut, that's €9,10 of overhead allocated to one cut. This is the input that gets skipped most often — and it's the single biggest determinant of whether a salon actually makes money or just turns over revenue. Set up fixed costs in nouz and the daily slice pro-rates automatically. After overhead is in the formula, the residual figure is your contribution margin — that's the number every service needs to defend.

A worked pricing ladder

Now sum the four inputs for the women's cut, then apply the margin target:

Round to €48,00. That's the floor, not the ceiling. If the local market bears more, charge more — overhead, product and labour costs are fixed; the margin lift is pure EBIT.

Run the same ladder for every service. A men's cut at 30 minutes of chair time drops to €27. A full colour at 150 minutes lands at €115. A blow-dry-only at 40 minutes lands at €32. Each price is defensible because each price is built.

I was charging €38 for a women's cut because that's what the salon down the street charged. When I actually ran Hannes's ladder, my break-even was €38. I was working for zero margin for two years. I raised to €48 last spring and lost two clients out of two hundred.

The Monday check

Once prices are set, the work is watching per-service margin weekly. The product card in nouz shows EBIT per service after labour, product and overhead. If margin on any service slips more than 2 points week-over-week, something moved — usually product cost from a supplier change, or chair time creeping up because consultations got longer.

For a deeper walk through bundle pricing (cut + colour + treatment), see service-line pricing for boutique salons, or jump to the condensed version in the salon service pricing formula. For the daily routine that surfaces margin drift, see the 60-second daily routine. If you want a worksheet to run the ladder on every service in your menu, grab the free salon service pricing worksheet.

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