How the Working Families Tax Cut is Helping Barbershops and Salons

In addition to No Tax on Tips, the Working Families Tax Cut is helping barbershops and salons with a provision called 45B, which facilitates customer tips on credit cards without triggering on unfair tax. This is the same treatment restaurants have had for decades, which is now finally available to barbershops and salons thanks to the tax cut.

Salons and barbershops also benefit from the permanent across-the-board income tax rate cuts as well as the permanent, immediate full business expensing provisions.

Examples include:

Five Senses Spa, Salon & Barbershop (Peoria, Illinois) — The Working Families Tax Cut 45B provision is helping to provide tax relief and investment in employee benefits, education, technology and equipment:

“A $20 tip that my business doesn’t keep has historically cost Five Senses about $2.24 in taxes. Multiply that across 20 years: we have paid our employees more than $2.3 million in tips and incurred more than $176,000 in FICA taxes on those tips. The permanent expansion of Section 45B to the beauty industry finally gives salons and spas the same tax treatment restaurants have had for decades. For Five Senses, those savings can now be reinvested into our employees and our business through benefits, education, technology, equipment and continued growth. After years of advocating for this change, seeing 45B become law is an incredibly meaningful victory for our entire industry.” — August 2026 statement from Paola Hinton, owner of Five Senses Spa, Salon & Barbershop.

Gratitude Spa & Salon (Bismarck, North Dakota) — No Tax on Tips is increasing the tax savings available to salon employees, who earn between $11,000 and $25,000 annually in tips according to the salon’s owner:

“Thank you so much for having me. I’m honored to be here. My name is Kristin Chorne, and I’m from Bismarck, North Dakota. I own Gratitude Spa and Salon.

“When this bill was introduced, I actually emailed the senators and our representative, asking to include salons and the beauty industry in the no tax on tips policy because it wasn’t originally in the bill. It has made a huge impact.

“I can tell you, in 2025, the salon took in $160,000 in tips. It’s a significant amount for our employees. Our average full-time employee earns between $11,000 up to $25,000 a year in tips. So, it’s real money!

“We have an all-female staff—lots of single moms, single females just starting out, and I’m hearing amazing stories as a lot of them have already filed their taxes and are not paying in this year. They’re getting a great return that they can put to use in real life. So, thank you for voting for this bill.” — February 24, 2026, Kristin Chorne, owner of Gratitude Spa & Salon, Bismarck, North Dakota. Testimony reported by Rep. Julie Fedorchak’s office.

John, Barbershop Owner (West Des Moines, Iowa) — Full business expensing is helping his small business invest in new equipment and hire workers, while 45B and No Tax on Tips allows workers to keep more of their earnings:

“Running a small business’s real work. We work long hours, we take big risks, we invest every dollar into our chairs. Every haircut account for real. The one big, beautiful bill is finally giving business owners like me a fair shape. It locks in a small business tax deduction. It makes 100% expenses terminate. So, when I buy new clippers, update the chairs, or hire a new apprentice, I can finally afford it. But the biggest change, and I mean the biggest change. I’m not paying taxes on tips anymore. Tips are earned through hard work, not some bonus. We shouldn’t be taxed twice for doing a good job. At the end of the day, that bill lets us keep more of what we earn. I want to thank Congressman Nunn for standing up for mainstream businesses like mine. This bill is pro-worker, pro-growth, and finally treats small businesses like the backbone of the economy that we are.” — September 2, 2025, John, barbershop owner, West Des Moines, Iowa. Testimonial published by Rep. Zach Nunn.

Angie Katsanevas (Utah) — 45B and No Tax on Tips are proving helpful:

“This new provision, passed as part of the One Big Beautiful Bill Act, provides an above-the-line deduction of up to $25,000 for qualified tips received by both W-2 employees and 1099 contractors, Effective in tax years 2025–2028, the provision also extends the employer-side FICA credit under Section 45B to beauty and salon services. This is essential to keep more hard-earned money in my employees and my franchisees’ employees’ pockets. This legislation, now signed into law, has been essential to keeping small business owners’ tax burden more predictable, affordable, and encouraging reinvestment in their business and employees so we can continue to grow and give back.” — January 22, 2026, Angie Katsanevas, Founder of Lunatic Fringe Salons, testimony before the U.S. House Small Business Committee hearing on “Local Ownership, National Brands: How Franchising Is a Pathway to Entrepreneurship.”

Sport Clips (Nearly 1,800 Franchises Nationwide) — No Tax on Tips and the extension of the employer tip tax credit (45B) to the beauty industry are increasing workers’ take-home pay while helping small businesses reinvest, open new locations, and hire additional employees:

“The passage of No Tax On Tips and the extension of the employer tip tax credit to the beauty industry is historically impactful for our industry. Licensed hair and beauty services professionals will see an increase in their take-home pay, making these careers even more attractive. Small businesses across the country will be empowered to thrive and reinvest, open new locations, better serve consumers, and employ a greater number of talented professionals.” — July 4, 2025, Edward Logan, President and CEO of Sport Clips, statement published by the Professional Beauty Association.

Garbo’s Salon and Spa (Statewide Throughout Nebraska) — No Tax on Tips is helping salon employees keep more of their earnings, including enabling one employee to use her additional tax refund to pay down more than $4,000 in high-interest medical debt:

“I want to say thank you to this committee for the inclusion of the no tax on tips provision…The no tax on tips provision has made a real difference for many of our employees. One employee shared with me that the additional refund she received allowed her to finally pay off more than $4,000 in high-interest medical debt…The Working Families Tax Cut Act, especially the No Tax on Tips provision, is making a positive difference for our employees, our businesses, and our communities.” — May 20, 2026, Darcy Mahalik, owner of Garbo’s Salon and Spa, testimony reported by the U.S. House Committee on Ways and Means.

Great Clips (Green County, Tennessee)— No Tax on Tips helped an employee receive a tax refund that enabled her to add her husband to her health insurance:

“Year after year, I have filed my taxes and somehow ended up having a balance due. This year, with the help of No Tax on Tips, when I filed, I was thrilled to be receiving a refund. The refund enabled me to enroll my husband as a dependent on my health insurance. And, for the first time in his entire adult life, he is fully covered on medical.” — April 15, 2026, Stacey Tyree, Great Clips employee, testimony reported by the House Republican Conference.

St. Louis Franchise Small Business Franchisee Jesse Keyser (St. Louis, Missouri) — No Tax on Tips is increasing employee take-home pay, while the FICA tip credit (45B) and bonus depreciation/full business expensing are providing capital for the business to expand, build new salons, and create jobs:

“Over the past year, the new tax plan has had a real impact on my business. I employ about 400 tipped employees, primarily in salons, and the No Tax on Tips policy has put directly into their paychecks more money — people feel it every single pay period.

“On the ownership side, the FICA tip credit creates meaningful savings for us. That’s growth capital. It’s enough to support building a new salon each year, and every one of those that we create, there’s about 10 full-time jobs with employees earning $65,000 or more a year.

“And when we do build, bonus depreciation allows us to reinvest aggressively by reducing the upfront tax burden. This isn’t theoretical. It’s higher take-home pay for my employees and real growth and expansion on my end.” — May 8, 2026, Jesse Keyser, franchise small business owner based in St. Louis, Missouri. Testimonial published by the House Ways and Means Committee.

Kem, a cosmetologist in Morgan County, Illinois: No Tax on Tips is helping a cosmetologist keep more of her earnings to support her family:

“I am a cosmetologist & the ‘No tax on tips’ has been wonderful! This really helps my family’s income. I greatly thank my Congresswoman, Mary Miller, for voting YES on this Bill.” — September 10, 2026, Kem, cosmetologist, Morgan County, Illinois. Testimonial published by Rep. Mary Miller.