Hair salons, barbershops, spas, and other beauty service establishments owners are mostly comprised of middle class women and minorities, employing more than 2x the national average.
FICA Tax Tip Fairness
Employment-based beauty establishments have been subject to unfair disparities in the tax code for decades.
Now, Congress has officially passed the 45B FICA Tip Tax Credit, finally providing tax fairness for salon, spa and barbershop owners by allowing employers a dollar-for-dollar tax credit on the employer portion of FICA taxes on employee tips.
PBA celebrates this moment as a generational victory for the more than 1.3 million professionals who power the beauty industry across the United States. For the first time ever, beauty business employers will receive the same tax credit afforded to restaurant employers since 1993.
This change corrects a decades-old tax inequity and delivers long-overdue recognition to an industry made up overwhelmingly of women, diverse entrepreneurs and single-location small-business owners.
Now, Congress has officially passed the 45B FICA Tip Tax Credit, finally providing tax fairness for salon, spa and barbershop owners by allowing employers a dollar-for-dollar tax credit on the employer portion of FICA taxes on employee tips.
PBA celebrates this moment as a generational victory for the more than 1.3 million professionals who power the beauty industry across the United States. For the first time ever, beauty business employers will receive the same tax credit afforded to restaurant employers since 1993.
This change corrects a decades-old tax inequity and delivers long-overdue recognition to an industry made up overwhelmingly of women, diverse entrepreneurs and single-location small-business owners.
FICA Tip Tax FAQs
There’s been plenty of buzz—and plenty of confusion—about the new federal tax credit for FICA taxes on tip income. PBA is here to make it clear.
NO TAX ON TIPS FAQS
No Tax on Tips is a new, temporary federal income tax deduction that allows workers in traditionally tipped industries to deduct a portion of their tip income on their federal taxes—for tax years 2025 through 2028.
KOPSA OTTE WEBINAR REPLAY
PBA Preferred Resource Provider Kopsa Otte breaks down “One Big Beautiful Bill – Taxes on Tips.” Watch the replay.
CONGRESS PASSES TIP TAX CREDIT
A historic victory for the professional beauty industry brings long-overdue tax fairness to salon, spa and barbershop owners.
DONATE
PBA has invested significantly in making this victory possible—and there are still costs to cover. As industry owners stand to benefit financially from this historic achievement, we encourage your support in helping us close out the final phase of this effort.
Read about FICA on Forbes
PBA was spotlighted in a Forbes article, where they provided insights on how the FICA Tax Tip credit can benefit both employers and employees.
What Is The FICA Tax Tip Credit?
In 1993, Congress created the 45B FICA tax tip credit, allowing restaurants to claim a dollar-for-dollar credit on the employer-paid portion of FICA taxes for tips employees earn directly from customers.
Since 2001, the beauty industry has fought to extend that same benefit to our small-business owners. As the second-most tipped industry in the country, it was only fair that beauty professionals receive equal treatment under the tax code.
The Professional Beauty Association is proud to share that, as of July 4, 2025, our industry finally has access to this long-overdue credit—and the recognition it deserves.
FICA IN THE NEWS
The Detroit News – Tolunay: Keep the beauty in the Big, Beautiful Bill
The Hill – Salons and Barbershops are Being Taxed Unfairly
Tampa Bay Times – Tipping at Florida’s Hair Salons Should Get the Same Treatment as at Restaurants
Pittsburgh Post-Gazette – Rick Santorum: Our Tax System is Unfair to Salons and Barber Shops
Who this affects
14% African Americans
23% Asians
83% Women
60% women-owned salons
Alliance for
Tax Equity
- International Franchise Association
- National Association of Barber Boards of America
- National Association of Women Business Owners
- National Interstate Council of State Boards
- Personal Care Products Council
- Professional Beauty Association
- Professional Beauty Employment Coalition
- The Esthetics Council
- Associated Skin Care Professionals
- Associated Hair Professionals
- Associated Nail Professionals
- Intercoiffure America Canada
- International Salon Spa Business Network
- International Spa Association
- Cosmetologists Chicago
TEXT ADVOCACY
Want to stay in the know with new resources? Text PROBEAUTY to 1-888-561-3172
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