When pay rates come up for multi-teacher studios, the idea of paying them a certain % often comes up. That’s not my favourite way to think about this. Do law practices or accountancy firms think about their employees’ wage as a percentage of what they charge?
Nope. They pay them a fair wage (or what the market will bear.) They also make sure they’re profitable so that they can reward their shareholders. The two are not intertwined.
I understand the instinct to ask for a percentage. It’s simple. But it doesn’t take into account variables like rent, rates, utilities, materials, processing fees and so much more.
We all know that our teaching rate is not our per hour rate. If we charge students $20 per 30-minute lesson, we don’t actually net $40 an hour. So don’t use this as a basis for calculating your mentee’s pay.
Instead, let’s start with what we think is a fair wage as a hypothesis and then test that to see if it stacks up in our business.
You will also want to factor in a few extras if you’re going to be including those.
Important note: I do not recommend charging these students a different rate than your own students. Remember that our goal is to keep their experience and educational outcomes the same as your own students. The fees should reflect that.
If you have recitals or other events as part of your studio calendar, you should consider whether you’re going to pay your mentee teachers to attend.
If you are not going to pay for these hours, I believe they should be optional. You can tell your mentees that you would love them to come along but you can’t expect them to work. They should be there as audience members only.
Paying your mentees for this time could be very beneficial as they will be able to help you with aspects of the event – whether that’s playing duets with students, handling photography or distributing programs. It’s also a pretty small outgoing in the scale of the year, so I think it’s worth doing when possible.
You may or may not have a choice in this regard depending on where you live. If you do not have an obligation to provide paid holidays or sick leave, you still need to consider what will happen if your mentee is sick or away. Will you refund those lessons to the families? Will you substitute for them (assuming you don’t teach at the same times)?
I prefer to allow for 2 flex weeks as part of my calculations so that we all have a little flexibility built in without the need for refunds. These weeks are not paid, but my teachers are receiving holiday pay as a percentage of their hours. Again, this is something you should speak to your accountant about to make sure you are meeting the requirements in your area.
I like to give a small gift to my teachers at Christmas and before the summer break to show my appreciation. If you would like to do the same, this should be allowed for in your budget.
Please note that if you give bonuses (i.e. extra pay) instead of gifts, your teachers may need to pay tax on those. This is one reason a gift card is often a great option.
If you have employees (not contractors,) you’ll probably have to pay some taxes on their behalf and a payroll processing fee to your accountant. Research what these costs are likely to be so you can plug them into your calculator.