Is a no-show fee I collect when a customer doesn't show up for their appointment also subject to revenue reporting?
Yes, it is. Consideration received under a deposit or cancellation fee, regardless of whether the service was actually provided, must be recognized as revenue and reported. No-show fees automatically charged through a booking platform are easy to miss, so be sure to check settlement details carefully and reflect them without omission. Given how high the materials cost ratio runs for items like gel and parts, we recommend managing both revenue omission and expense documentation together.
The Most Confusing Part — No-Show Fees and Materials Cost Ratio
Reporting cancellation fees correctly and managing a high supplies ratio are the keys here
No-show fees must also be reported as revenue
A fee received when a customer doesn't show up must be recognized as revenue even without an actual service, regardless of whether the service was provided. Check no-show fee details that are automatically charged through booking platforms thoroughly and reflect them in revenue to avoid omissions.
Carefully collect your materials purchase documentation
Gel, parts, and art supplies make up a high share of materials cost relative to your service prices. Obtaining a bill or card receipt from a wholesaler lets you recognize the purchase as a deductible expense and significantly lower your actual tax burden.
Income Structure of Nail Salons
Key Expense Items
Must-Read for Nail Salon Owners
Split Your Equipment & Materials Costs by Type to Save on Taxes
From nail stations to artist incentives, categorizing each item correctly cuts unnecessary tax
Long-Term Fixed Assets — Depreciable Equipment
Nail equipment: nail station, cuticle care device
Curing equipment: UV/LED lamp
Environmental equipment: ventilation system for gel odor management
If a single transaction exceeds 1 million KRW, it's classified as a depreciable asset and must be expensed over its useful life.
Supplies — Immediately Deductible, Key to Cost Ratio Management
Gel, parts, art materials, and sanitizing supplies are fully expensed at the time of purchase. Given the high share of materials cost in this industry, managing purchase documentation without omission is the key to tax savings.
Personnel Service Costs — Artist Incentives
If a nail artist is settled as a business-income earner (3.3%), withhold 3.3% of the incentive payment and file and pay it by the 10th of the following month.
Booking Platform & Marketing Costs
Booking platform fees like Naver Booking and Instagram advertising are recurring monthly expenses that are fully deducted at the time incurred.
| Category | Examples | Tax Treatment |
|---|---|---|
| Long-term fixed assets | Nail station, UV lamp, ventilation system | Depreciate if over 1 million KRW |
| Supplies | Gel, parts, art materials, sanitizing supplies | Fully deductible at purchase |
| Personnel services | Nail artist incentives | 3.3% withholding or employment income |
| Booking platform & marketing | Naver Booking, social media ads | Immediately deductible |