IRS Personal Appearance & Wellness (TTOC)
Do estheticians qualify for the No Tax on Tips deduction?
Estheticians and skincare specialists are on the IRS Treasury Tipped Occupation Code list. The profession sits between two worlds — traditional spa/salon service (clearly TTOC-eligible) and medspa work (where the 'specified service business' exclusion may apply). If you work at a chain spa or independent aesthetics studio, you're straightforward. If your workplace is medically-supervised or classifies as an SSTB, there's a wrinkle worth understanding.
Short answer
Yes, for most estheticians. Estheticians and skincare specialists are on the IRS TTOC list. Voluntary tips on facials, waxing, chemical peels, and other treatments qualify for the federal No Tax on Tips deduction — up to $25,000 per year. Estheticians working at a medspa or dermatology practice may hit the SSTB exclusion; check with a CPA if your workplace is medically-supervised.
How much could you save?
Typical tip income for estheticians.
Full-time estheticians typically report $8,000-$18,000 in annual tip income. Premium services (chemical peels, dermaplaning, advanced facials) command higher tips per session. Booth-rent estheticians building a private clientele can push $20,000+ once established.
For estheticians specifically
What counts as a qualified tip — and what doesn't.
✓ Qualifies
- Voluntary tips on facials, waxing, brow/lash services
- Voluntary tips on chemical peels and skin treatments (at a non-SSTB spa)
- Voluntary tips on retail add-ons when the client tips voluntarily
- Venmo/Zelle tips from repeat clients
✗ Does not qualify
- Service fees or 'sanitation surcharges' the spa adds to treatments
- Product commissions from retail skincare sales
- 'Membership program' fees the spa charges
- Tips received while working at an SSTB (medspa, dermatology office) — SSTB exclusion
- Digital-asset/crypto tips
A worked example
Yasmin, a real-world esthetician.
Yasmin is a commission esthetician at a mid-tier day spa, W-2, single filer, MAGI $46,000. For the tax year, she logged $11,400 in qualified tips. She sits in the 22% federal marginal bracket.
- Deduction allowed: Full $11,400 deduction (under cap and MAGI threshold)
- Estimated savings: About $2,508 off federal income tax
This is an illustrative example, not a guarantee. Your actual savings depend on your filing status, total income, state, and other deductions.
Questions specific to estheticians
What other estheticians ask.
I work at a medspa — do I still qualify?
Maybe not. Medspas that are primarily medical practices (physician-owned, delivering medical services like Botox and fillers) often qualify as 'specified service businesses' under §199A. §224 excludes SSTB workers, even if your personal role is tipped. Ask the medspa's accountant whether the business is classified SSTB — that answer determines your eligibility.
What about tips on tinting or waxing services?
Voluntary tips on any treatment — waxing, tinting, brow shaping, lash lifts — qualify as long as you are working at a non-SSTB spa or salon. The service itself does not matter for §224; only whether the workplace is a specified service business.
I sell skincare products and earn a commission. Does that qualify?
No. Retail commissions are business income or wages, not tips. They do not qualify for §224 even though they come through the same paycheck. Only voluntary customer tips on the service portion qualify.
I do mobile facials in clients homes as a 1099 side gig. Does that count?
Yes — mobile esthetician work is TTOC-eligible. As a 1099 worker, your deduction is capped at net self-employment income from that work. Track supplies, mileage, and equipment costs carefully to support the Schedule C net.
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Track every shift
The deduction is real money — if you can prove your tips.
Qualified Tips logs each shift the moment it ends — timestamped, exportable, IRS-aligned.