A customer books a haircut, adds a beauty treatment and buys a cosmetic product. The salon takes one payment, but the sale can contain three VAT rates.
At a glance: From 1 July 2026, qualifying hairdressing services use 9% VAT. Beauty salon services covered by Revenue’s reduced-rate classification generally use 13.5%; cosmetic retail sales and sunbed treatments use 23%. Apply the treatment to each actual supply, then reconcile the booking or till report with the accounts.
For a growing salon, this is also a margin question. A sale coded at too low a rate can make net revenue look stronger while leaving VAT understated. The customer payment and bank balance can look entirely normal.
Stock photograph: Greg Trowman / Unsplash.
Which VAT rate applies to a salon sale?
The starting classifications for a VAT-registered salon making these supplies in Ireland are:
| What is supplied | Current rate | Key distinction |
|---|---|---|
| Qualifying hairdressing service | 9% | The service is classified as hairdressing, not simply as something sold in a salon |
| Beauty salon service within Revenue’s reduced-rate category | 13.5% | The hairdressing reduction does not extend to every beauty treatment |
| Cosmetics sold separately | 23% | A retail purchase is distinct from a treatment |
| Sunbed treatment | 23% | Revenue specifically excludes this from the reduced-rate beauty category |
Sources: Revenue’s hairdressing entry, beauty salon entry and current VAT rates, checked on 11 October 2026.
Use the actual treatment description when checking an unusual service. The word “wellness”, a practitioner qualification or the fact that a treatment happens in a clinic does not by itself establish an exemption. Specialist treatments need their own classification rather than a broad “beauty” assumption.
Three rates across one month: a worked example
Here is a fictional month’s sales for a VAT-registered salon. All customer prices include VAT. Assume ordinary hairdressing, beauty services correctly classified at 13.5%, and cosmetic retail sales at 23%. There are no vouchers, deposits, refunds or exempt supplies in this simplified example.
| Sales category | Customer sales including VAT | VAT included | Net sales |
|---|---|---|---|
| Hairdressing at 9% | €10,900 | €900 | €10,000 |
| Beauty treatments at 13.5% | €5,675 | €675 | €5,000 |
| Cosmetic retail at 23% | €2,460 | €460 | €2,000 |
| Total | €19,035 | €2,035 | €17,000 |
The calculation works backwards from the inclusive price. Hairdressing sales of €10,900 divided by 1.09 give €10,000 net sales; the difference is €900 VAT. Apply the same method to each category at its own rate.
If the entire €19,035 were coded at 9%, the system would show €1,571.70 output VAT and €17,463.30 net sales. Output VAT would be understated by €463.30, with net revenue overstated by the same amount.
That error could distort a decision about commission, another employee or spending. More than €460 appears to be available when the example’s sales calculation says it belongs in output VAT.
This is VAT on sales, not the final VAT payment. Recoverable input VAT and other adjustments must be considered when preparing the return. The table is also a sales analysis, not a profit figure: wages, products used in treatments, rent and other costs still have to be deducted.
Retail sales and products used in a treatment are different questions
A cosmetic product sold to the customer to take home is a separate retail transaction in the example. Products used while delivering a treatment require analysis of that service and its components. Do not automatically treat the bottle used during an appointment as if the customer had bought the bottle.
Give separately sold cosmetics their own sale items and accounts category. That also helps you see whether retail adds useful margin or simply ties up cash in slow-moving stock.
Classify what you actually supply, then check whether the net price covers the work and product costs.
Packages and discounts: classify first, then allocate
Suppose a salon sells a separately available treatment and cosmetic product together. A single package price does not automatically give both the treatment’s VAT rate.
Revenue distinguishes multiple supplies, whose separate elements retain their treatments, from composite supplies, where ancillary elements generally follow the principal supply. Check which arrangement you have before choosing the code. See Revenue’s mixed-supplies guidance.
For a package established to be a multiple supply, keep a reasonable allocation of the selling price and discount between the elements. Record the method when setting up the offer, using Revenue’s package and discount guidance.
Agree the split before launching the promotion, so it can be recorded correctly from the first sale.
Deposits and gift vouchers need separate records
For an ordinary taxable appointment, VAT is generally due when a pre-payment is received, rather than being postponed until the treatment. Revenue sets out this rule in its advance-payment guidance.
Gift vouchers have their own rules, including single-purpose and multi-purpose classifications that affect the tax point. A voucher usable across differently rated supplies needs care. Confirm its treatment from the terms of the voucher, not simply the label “gift card”. See Revenue’s voucher guidance.
Keep voucher issues, redemptions, deposits, completed appointments, refunds and cancellations identifiable. Otherwise the same customer money can enter the sales report twice, or be left out of the period that needs reviewing.
Reconcile the booking system, sales report and bank
A practical monthly check should answer three questions: what was sold, what VAT belongs to it, and how the money reached the business.
| Check | What the owner or bookkeeper needs |
|---|---|
| Sales classification | A maintained list of services and products, with the VAT treatment and source for unusual items |
| Booking and POS setup | Separate codes for materially different sale categories, with dated changes and tested receipts |
| Sales-to-accounts comparison | Gross sales, output VAT and net sales by category, matching the accounting import |
| Payment reconciliation | Card settlements, cash, refunds and processing fees explained separately |
| Exceptions | Vouchers, deposits, packages and independent-practitioner arrangements flagged for review |
Card processors usually settle after fees or delays. Record the original sales and explain the deductions; coding the net payout as the whole sale can lose both revenue and VAT detail.
Where independent practitioners operate from the same premises, establish whose sale the customer is paying for and how collections are handled. The premises name alone does not make every receipt salon revenue. Rent and other charges between businesses also need their own tax review.
Test the reports using one haircut, one beauty treatment, one retail item and a mixed transaction. Follow each through to the accounts. Keep a dated list of rate changes and nominate the person who reviews new services, products and packages before they go on sale. Review exceptions rather than assuming the software’s default has made the judgement for you.
Keep the registration decision separate from the rate
The rate tells you how a taxable supply is treated. It does not, by itself, decide whether your business must register. Selling some retail products alongside appointments also does not automatically make the salon a goods-only business.
Our VAT threshold guide covers the registration rules. Before a significant fit-out or expansion, look at both recoverable VAT on spending and the effect on the customer price and margin. A reclaim alone is not the whole commercial calculation.
Make the numbers useful for running the salon
Once the sales categories reconcile, compare what hairdressing, treatments and retail actually leave after their costs. A busy appointment book and a healthy bank payout can hide weaker margins or money owed for VAT.
Our beauty and wellness accounting page explains Around Finance’s work with businesses in the sector. If you run a growing salon and want ongoing support with reliable accounts, tax and financial decisions, book a Finance Fit Call.
Frequently asked questions
Did every salon service move to 9% in July 2026?
No. The change applies to qualifying hairdressing services. Beauty services and other supplies need their own classification.
What is the VAT rate for beauty salon services?
Revenue’s beauty salon category uses the reduced rate, currently 13.5%. Cosmetics and sunbed treatments are specifically excluded and use 23%. Check specialised treatments separately.
Can a mixed customer bill contain more than one VAT rate?
Yes. Separate supplies can retain different rates even when the customer makes one payment. The sales record needs to preserve the split.
Do we add 9% to a price that already includes VAT?
No. If €109 includes 9% VAT, net sales are €100 and VAT is €9. Adding 9% again would charge VAT twice on that inclusive price.
Does the monthly example show what we pay Revenue?
No. It shows output VAT on the specified sales. The return also considers recoverable purchase VAT and other required adjustments.
Can we wait until an appointment happens to deal with its deposit?
For an ordinary taxable appointment, VAT is generally due when the pre-payment is received. Keep the payment and appointment records; gift vouchers and cancellations need their own treatment.
