Did you know that misclassifying employees as 1099 contractors is one of the most common and costly mistakes estheticians make? It’s an easy trap to fall into—especially if you’re following what other beauty pros around you are doing. But here’s the thing: getting this wrong can cost you thousands in back taxes, legal fees, and even put your business at risk.
In this article, we’re going to break down:
✔️ What a 1099 contractor actually is
✔️ The biggest myths estheticians believe about 1099s
✔️ Why hiring W-2 employees could save your business
✔️ How to legally classify your workers (and avoid IRS trouble!)
Let’s get into it!
My 1099 Hiring Mistake (And What It Taught Me)
When I first started hiring, I did what every salon and spa owner around me was doing—I hired a 1099 contractor.
✔️ I didn’t know the laws.
✔️ It seemed like the easiest option.
✔️ Everyone else was doing it, so it must be fine, right?
Wrong.
I had a lash artist working as a 1099, and one day, she just didn’t show up. Clients were texting me, upset about missed appointments. And you know what? I couldn’t do anything about it.
Why? Because legally, she was NOT my employee.
• I couldn’t control her schedule.
• I couldn’t require her to notify me if she left.
• I couldn’t protect my brand reputation.
That’s when I realized…I had zero control over my business.
And listen, I spent years building a five-star reputation. I wasn’t about to let one contractor take that away. That’s when I knew: I had to switch to hiring W-2 employees.
The #1 Thing Estheticians Get Wrong About 1099s
Most estheticians think as long as you don’t set someone’s schedule, they can be a 1099.
🚨 This is FALSE. 🚨
A true 1099 contractor is like a freelancer. Think of them as a beauty nomad—they float from business to business, using their own tools, products, and booking systems.
🚫 If you have someone who:
• Uses your business’s products
• Takes clients from your booking system
• Works inside your space every day
• Gets paid commission
👉 They are NOT a 1099.
If you misclassify a worker, you could get hit with the “hella trifecta”:
✔️ The IRS can come after you (back taxes + fines)
✔️ The Department of Labor can sue you (for unpaid wages)
✔️ The State Employment Department can penalize you (more taxes + possible jail time)
Yup, it’s that serious.
Why Do Estheticians Default to 1099s?
Here’s the hard truth—most estheticians hire 1099s because they’re afraid of payroll taxes.
I hear things like:
❌ “I can’t afford employees.”
❌ “I don’t want to pay payroll taxes.”
❌ “I don’t know how to do payroll.”
But here’s what they don’t realize…
If your pay structure is set up correctly, your business is covering the cost anyway.
Let’s say you’re paying a 1099 65% commission. That might sound good—until you realize that when you switch them to a W-2, you have to pay an extra 7% in payroll taxes.
So what happens? You suddenly realize you’re making no money.
That’s why your pay structure MUST be profitable from the start.
💡 Inside my course, The Esthetician’s Guide to Profitable Pay Structure, I teach estheticians exactly how to structure payroll so they don’t lose money on employees.
When you do it right, you’re not losing money—you’re making more and scaling the RIGHT way.
The Legal Test: 1099 or W-2?
So how do you actually know if someone is a 1099 or a W-2?
There’s something called the IRS 20-Factor Test. But let’s keep it simple…
If you:
✅ Set their hours
✅ Provide their tools & products
✅ Require them to use your booking system
✅ Expect them to ONLY work at your business
👉 They are a W-2 employee. Period.
1099s & Taxes: What Estheticians Don’t Realize
Here’s something most beauty pros never think about…
🛑 1099 contractors pay DOUBLE the taxes of a W-2 employee.
When you hire a 1099, you’re not saving them money—you’re dumping your tax responsibility onto them.
So when a salon owner says:
“Oh, it’s better for you because you won’t have to pay taxes!”
🚨 They are LYING to you. 🚨
This is why so many 1099 workers fail. They’re forced to cover both sides of their taxes, which kills their profits.
And if your 1099 worker ever files for unemployment or reports you to the IRS, you’re in trouble.
How to Fix This & Scale Profitably
If you’re currently hiring 1099s, here’s what you need to do:
1️⃣ Take the IRS 20-Factor Test (Google it—it’s free).
2️⃣ If you’re misclassifying workers, FIX IT NOW.
3️⃣ Switch to hiring W-2 employees so you can scale your business properly.
And listen, I get it—this feels overwhelming.
I used to be terrified of payroll too.
But guess what?
I was the only spa in my entire town that scaled successfully.
Why? Because I did something different.
✔️ I hired W-2 employees.
✔️ I trained them.
✔️ We built something together.
And that’s why my business was profitable—while everyone else around me stayed stuck.
Your Next Steps
If you’re tired of:
❌ Being scared of payroll
❌ Hiring people who ghost you
❌ Paying out commission that eats your profits
💡 I’ve got something for you.
🚀 My brand-new course, The Esthetician’s Guide to Profitable Pay Structure, will teach you exactly how to:
✔️ Pay your employees the right way
✔️ Set up a profitable commission structure
✔️ Stop worrying about payroll taxes
✔️ Scale your business the right way
Go to and enroll today.
🚀 Your business will grow when YOU do. 🚀
Final Thoughts
1099s sound easy, but in the long run? They can wreck your business.
If you’re serious about growing a real, sustainable beauty business—one that pays you, supports your employees, and actually makes money—you need a system that works.
🔹 W-2 employees give you control over your brand.
🔹 A solid pay structure ensures your business stays profitable.
🔹 Making the switch protects you from legal trouble.
🔥 Ready to build a real business? Start today.🔥
👉 Click here to enroll in The Esthetician’s Guide to Profitable Pay Structure! Here
And if this blog helped you, share it with another esthetician who needs to hear this.
Your business will grow when YOU do.
Now, let’s build your empire. 🚀
Comments