Different ways to pay your freelance instructors
If you’re reading this, chances are, you’re trying to figure out how to pay your instructors as a business owner! Running a fitness business is no easy task and out of the many challenges to overcome, one of them is to figure out how you should pay your instructors.
Your instructors are the heartbeat of your business. They are more than just instructors: they are the driving force behind your member’s progress, brand representation, and ultimately, the success of your business! Thus, they should be appropriately remunerated.
Now, how do you remunerate your instructors such that the calibre of talent you attract and retain will be at the highest level possible? Flat-rate? Tiered range? Percentage revenue? Let’s dive in and find out!
1. Flat-rate
Arguably the simplest way of paying your instructors. Flat-rate pay system just means that you will pay your instructors $X for every lesson that they teach. For trainers who are not as experienced or do not possess any certifications, they could be paid lesser.
On the other hand, experienced trainers or those who have qualified certificates would definitely demand a higher rate. Assuming that lessons run for an hour, the rate could range from $30 for newer instructors to above $100 for experienced instructors.
2. Tiered Range
A rather popular way of paying instructors would be using tiered range. An example would be for 1-3 students in a class, instructors could be paid $30. For 4-7 students in a class, instructors could be paid $50. For classes that have more than 7 students, instructors could be paid $80.
This form of payment structure would incentivise instructors to get students to attend their classes regularly. Some instructors might even put in the effort to check in with your members so that they would attend their classes consistently, making it a win-win situation for you as a business owner and your instructors.
3. Flat with commission
For this payment structure, it is essentially a combination of ‘flat-rate’ and ‘tiered-range’ scheme. Instructors could get paid $50 for classes that have up to 5 students for example. From the 6th student onward, they would get paid $10 for every additional student. This means that if a class has 7 students, the instructor would get paid $70.
This payment structure would incentivise instructors to attract every single additional student to join their class, as compared to tiered range. For “tiered-range”, once instructors hit the lower bound or a range say 4 students for “4-7 students”, they would have no incentive to get 1 or 2 more students as their pay would only increase if they are able to get 4 more students. Thus, “Flat with commission” structure solves this problem.
4. Percentage Revenue
This scheme is rather straightforward as well. Instructors are paid a percentage of the total revenue from each class they teach. For example, if the commission percentage is 50% and the total revenue from a class is $100, your instructor would be paid $50.
The advantage of adopting such a scheme is that business owners like you would not have to worry about paying your instructors even if the attendance for the class is low, which may result in your instructor cost being higher than your revenue earned, resulting in you making losses. For gyms that are just starting out or those that do not have a very strong cash flow, adopting a “percentage revenue” scheme would be a viable option.
5. Tiered Percentage
Lastly, “Tiered Percentage” model is essentially the same as the “Tiered Range” system. Instead of paying out an absolute figure, your instructors would be paid a percentage. An example would be for 1-3 students in a class, instructors would be paid 20%. For 4-7 students in a class, instructors would be paid 30%.
For classes that have more than 7 students, instructors would be paid 50%. The advantage of “Tiered Percentage” over “Tiered Range” would be the lower risk that you as a business owner are exposed to, since the amount paid would be in percentage of your revenue, instead of absolute figures.
Conclusion
Selecting the right payment structure for freelance fitness instructors is pivotal for your business’s success. As the driving force behind member progress and brand representation, instructors’ compensation should align with their role.
Let us help you with all these at vibefam! WIth vibefam, you will have the flexibility to set different payment structures for various classes, tailoring compensation to specific needs.
Highlights of vibefam’s Payroll System:
- Automated Calculations: Eliminate the risk of human errors and save valuable time with automated payroll calculations.
- Customisable Payment Structures: Tailor payment models for different classes based on your business requirements, providing a granular approach to compensation.
- Reduced Administrative Costs: Say goodbye to manual calculations, which are not only prone to errors but also time-consuming.
The appropriate payment scheme that aligns with your business goals goes a long way in motivating your instructors and results in a win-win situation for both you as a business owner and your instructors. Allow vibefam to help you grow your fitness business!
This article was written by Jaren Wong.