50/50 Commission—Employer vs Employee Shocker

Employees understand payroll deductions stated on their paychecks. Before their employer gets a paycheck likewise subject to personal payroll deductions the business must pay employer taxes and contributions, and operational overhead.

In the example on the next page, a parttime employee knows they groomed pets totaling $720.00 gross sales, and their 50% commission share is $360.00. The employee knows their employer retained $360.00.

The hidden story is that after payroll deductions the employee received a paycheck in the net amount of $253.26, but the owner’s $360.00 equal share was whittled down to a paycheck in the net amount of $53.04.

Very few employees understand this dramatic difference. We asked groomers in surveys to project just how much lower the owner’s share would be in such as case. Don’t misunderstand. The employee is not overpaid! The frustration of grooming employers often sources to this seeming distortion that employees don’t understand. Grooming Business in a Box® can show employers ways to use The Madson Management System to improve this disparity without lowering wages, even raising wages. Quality of pet care will never suffer, in fact, we can improve it.

Not one groomer surveyed estimated 20 Copyright © 2013 Find A Groomer Inc. All rights reservedless than $100.00. They did think the Subscribe www.egroomer.com

owner would get less than their $253.26, but most thought 20% to 30% less. Realistically, the owner gets around 80% less. We cannot expect employees to understand this disparity without explaining it. For this reason we create the illustration on the next page. Some employers have displayed it to staff at meetings to mixed results. Some employees got it and saw why expecting 55% to 60% can simply be unrealistic to some operations, especially if the business is paying even higher rents than we accounted for here. ◄