This is one of the most important questions a new massage school graduate will ask: Should I get a job as an employee or open my own massage practice?
I have gone from employee to business owner back to employee, and now I am running my own business once again. With this around-the-block perspective, I can compare these options for you.
Many massage therapists dream of owning their own businesses for many reasons: control of their schedule, getting to do things their own way, and, of course, making more money; however, being a business owner requires keeping up with many details and isn’t for everyone in every phase of life.
Massage Business Owner Income Potential
First, let’s look at whether self-employed massage therapists really make more money than massage therapists working for an employer.
According to the U.S. Bureau of Labor Statistics, the median earnings for massage therapists are $39,860 per year, or $19.17 per hour.
That’s for therapists working 40 hours a week, so it includes other business tasks.
We all know most massage therapists don’t do 40 hours a week of hands-on therapy, due to the job being so physically demanding, so massage can be a difficult profession to figure out.
Let me explain.
As a business-owning therapist, or sole proprietor, what you charge for a massage session and what you actually make from a session are different things.
A self-employed therapist has many expenses, including rent or lease; utilities; phone and internet; website-hosting fees; bathroom, cleaning and laundry supplies; massage supplies and equipment; a business license; local taxes; continuing education; business supplies and software; liability insurance; renter’s insurance; marketing materials; advertising; a bookkeeper; credit card processing fees; retail products and related supplies; decorations; session room cleaning fee; and payroll expenses if you have employees.
That is a lot of expenses.
Every business won’t have all of these expenses, but running a business isn’t cheap—and those expenses will need to be covered whether you have massage clients or not.
Every massage therapist needs liability insurance because you never know when an accident will happen in your practice. A client could slip in the hallway or have a bad reaction to a product. Without insurance, an unforeseen reaction could cost your reputation and your practice.
MASSAGE Magazine Insurance Plus covers massage therapists for only $159 per year.
After your expenses are paid, the left over is your pay as a self-employed massage therapist.
For example, let’s say a massage therapist with monthly business expenses of $1,000 sees 20 clients per week. That means $12.50 per massage goes toward monthly expenses.
If she charges $75 per session, that leaves $62.50 per massage. After taking out 15 percent for taxes, that leaves $53 for the therapist.
That sounds good, right? It is—but remember, the therapist might have a slower week when she sees just 10 clients. Her expenses per client will double, leaving the therapist with $40.50 per massage.
Using the 10-client week as an example, let’s add in work hours that aren’t hands-on, or paid.
This means 10 hours per week spent on office work, laundry, marketing, cleaning and time between clients results in our therapist averaging $20.25 per hour during a slower week.
During a 20-client week, however, she would average $41.66 per hour.
During a very slow week, the self-employed therapist might break even or lose money after expenses.
Self-employment is a risk, and of course the busier you are the more money you can make.
This is why getting your appointment book filled and clients rebooking regular massage sessions will give you income security.
One solution to the fluctuating income problem that some therapists struggle with is to sit down with an accountant and figure out a weekly salary so they can plan their personal expenses.
If you do this, then when you make a profit you can save more or take bonuses.
Employee Income Potential
Now we’ll look at your income potential as an employee.
With your employer taking care of most of the expenses listed in the preceding section, the money you make is yours to keep.
Your employer will even take care of your tax withholdings for you.
Massage therapist pay varies greatly depending on where you work.
Some of the different options are: An hourly base pay plus commissions per treatment; a percentage commission per treatment; a flat rate per treatment; hourly pay only; and salary.
The first two options on the list are probably the most common, so let’s take a closer look at those.
Base pay usually varies from minimum wage up to $12 an hour, and therapists will usually earn a 15 to 30 percent service commission as well.
Therefore, a therapist giving a 60-minute massage session at $75 per hour with a $10 base pay and 30 percent commission would make $32.50 for a massage; however, the base pay should also be paid for the rest of the time the employee is at work doing paperwork, laundry and other side work.
So, in an eight-hour shift containing five massages and a lunch break, it would look more like $70 total base pay plus $112.50 for treatments, totaling $182.50 for the massage therapist.
That breaks down to $36.50 per massage.
Employers must also match tax withholdings on employees of 6.2 percent.
To pay the therapist in this example would cost the employer approximately $194 total.
That leaves the employer $181 to pay all of the overhead and make a profit.
Of course, the therapist would make less on a slower day, but would have the security of the base pay. In my opinion this model is a win-win for the therapist and employer because the employer has therapists ready to see clients and the therapist has a guaranteed paycheck.
The next common way for an employed massage therapist to be paid is a straight commission.
Normally, commission will be anywhere from 40 to 60 percent of the cost of the massage session.
If our therapist on this pay system did five massages as in the example above, she would make $187.50 for the five massage sessions.
That’s almost the same as in our example above.
With 6.2 percent added on for taxes, the employer is paying almost 60 percent of the service price out in labor.
How much a business can afford to pay therapists depends on many factors, including what it charges, its overhead and business expenses, what other benefits it provides to employees and how much profit it needs to stay in business.
I often see massage therapists asking in online forums if a rate of pay is fair or not.
My answer to this is always that it depends on too many things to be answered by strangers in an internet forum.
It depends on all the details:
- If the pay is based on a percentage, a percentage of what?
- What other employee benefits are included?
- How busy is the business?
- What side work will be expected of the massage therapist?
- What are the prices in your area?
- Is the cost of living low or high?
- How much experience do you have?
In the end, what is fair is what works for you, in terms of providing what you need for your life.
We all know there are some things that are more important than money, such as work environment, and being respected and appreciated.
You Are in Charge
Whichever route you decide to take, self-employment or being an employee, the amount of money you make is up to you.
Concentrate on rescheduling your clients, being available, selling retail and upgrades.
If you work for yourself you will build a valuable and profitable business, and if you are an employee you will be invaluable and able to ask for a raise.
When you work for yourself, the potential to earn even more is there through growing your business and hiring other therapists, creating a retail area and the ability to create custom memberships and treatment plans for your clients.
There is also a greater risk because at the end of the day all the business expenses are your responsibility.
When you choose to work for someone else, you will certainly have a lot less to worry about on the business side of things, but it’s a trade off because there will be quite a few things you won’t have control over.
If you decide to choose employment, it’s worth taking your time to look for a job, to find a place that will be a good fit for you.
In the years after I sold my day spa and went back into employment, I worked to treat my employer’s business like I would my own.
This included showing up for work early, being available, taking last-minute clients, rebooking, pitching in with cleaning and laundry, and offering almost every client retail options.
Who do you think they booked the most? It’s true—me.
I don’t consider doing those things extras.
They are simply what needs to be done to be successful as a massage therapist—whether in private practice or employed.
Editor’s note: Download the free New Practitioner eBook, The Blueprint for a Successful Massage Career.
About the Author
Gael Wood has more than 20 years of experience in the massage and spa industry. She now concentrates on training massage and spa therapists in business, spa services and greater success. She is a regular contributor to MASSAGE Magazine and her articles include “Stepping Stones to Success: Build a Path to Career Longevity” (July 2016), and “Is Your Practice LGBTQ-Friendly? How to Create a Welcoming Space” Visit gaelwood.com for a complimentary Massage & Spa Success Toolkit.