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How to Start a Hair Salon in California: Licenses, Costs & Requirements

California does not hand you one salon license and send you on your way. The Board of Barbering and Cosmetology licenses every stylist and the salon itself, the Secretary of State takes your LLC filing, the Franchise Tax Board bills you $800 a year for the privilege, and your county clerk handles your business name. This guide walks through each piece with the fees, forms, and rules published by California agencies.

Researched from California state sources. Our guides are free. We may earn a commission when you use a partner service, at no additional cost to you.

Who licenses hair salons in California

One agency runs California hair licensing: the Board of Barbering and Cosmetology, part of the Department of Consumer Affairs, working under the Barbering and Cosmetology Act in the Business and Professions Code. The Board licenses the people, cosmetologists, barbers, and hairstylists, and it licenses the premises through the establishment license. No city or county issues a substitute for either license, though your city adds its own business license on top. Start with the Board's published requirements at barbercosmo.ca.gov, because older blog posts about California salon licensing routinely quote fee schedules and exam rules that changed years ago.

Two changes matter if your research is older. The cosmetology course dropped to 1,000 hours, and since January 1, 2022 the Board requires only a written exam; the practical exam is gone for every license type. The Board administers licensing through its online system and publishes its fee schedule in Title 16 of the California Code of Regulations, Section 998, which is the source for every Board fee in this guide.

California hair salon requirements at a glance

California licenses for the people who do the hair

The license your stylists need is the cosmetologist license. Section 7316(b) of the Business and Professions Code gives it the widest scope in the building: arranging, dressing, curling, waving, cleansing, cutting, singeing, bleaching, and coloring hair, plus manicuring, pedicuring, and skin care services. A licensed cosmetologist can legally cover a hair menu, a nail station, and basic skin services, which is why most salon teams are built around this license.

The path runs through school. A cosmetology course is 1,000 hours or more at a Board-approved school under Section 7362.5. Applicants qualify for the exam at 17 or older with a 10th grade education. Fees come in three small pieces from the Section 998 schedule: a $9 preapplication fee, a $75 application and examination fee, and a $50 initial license fee once you pass. The exam is written only, administered by PSI; the practical exam was eliminated on January 1, 2022. The license renews every two years for $50, with a $25 delinquency fee if you let it lapse.

Two alternate routes exist. The apprenticeship program substitutes 3,200 hours of supervised salon training for the school course. And experienced stylists moving into California get credit for out-of-state work: the Board counts each three months of practice in a related occupation as 100 hours of training toward the requirement. Your chairs can also be filled by licensees with narrower scopes, barbers at 1,000 hours for barbering services and hairstylists at 600 hours for hair services, as long as each person stays inside their own scope. What no one can do is work unlicensed: services performed by an unlicensed person are the fastest route to Board citations for both the worker and your establishment.

The salon establishment license for your space

The salon itself needs the Board's establishment license. Section 7347 of the Business and Professions Code puts it plainly: any person, firm, or corporation that wants to operate an establishment applies to the Board for a license. You apply on Form 1020 with a $50 application and initial license fee, and the application fee is nonrefundable. Renewal is $40 and the delinquency fee is $20, all from the Section 998 fee schedule.

You do not need a cosmetology license to own the salon. Investors and non-practicing owners hold establishment licenses all over California. What the license demands is that the establishment operate under the Act: every service performed by a licensee, sanitation and safety rules followed, and the establishment open to Board inspection. The Board issues one establishment license per address, which becomes important if you later add suites, and the license belongs to the owner and address on the application. Taking over an existing salon or moving to a new address goes through a fresh Form 1020 application, so sequence the paperwork before the sale or the move, not after the first client sits down.

Forming your LLC with the California Secretary of State

Most California beauty businesses, hair salons included, organize as a limited liability company, and the filing is cheap. It is what comes after the filing that surprises people. To form the LLC, file Articles of Organization, Form LLC-1, with the California Secretary of State. The filing fee is $70, and the form can be filed online through the Secretary of State's bizfile portal. Your Articles name the LLC, give its address, and name a registered agent, the person or company that accepts legal papers on the LLC's behalf.

Within 90 days of filing, and every two years after that, the LLC files a Statement of Information, Form LLC-12, with the Secretary of State for $20. The Statement lists the LLC's address, its managers or members, and its agent. Miss it and the state can suspend the LLC, which freezes your ability to enforce contracts and can complicate your bank accounts, so the two-year cycle belongs on your calendar from day one.

An LLC is not your only option. A sole proprietor files nothing with the state to exist, but also gets no liability separation: the business's debts and claims are the owner's personally. A corporation is a valid route too, and carries the same $800 annual tax described below. Whatever the entity, the licensing pieces of this guide do not change. The Board's establishment license, the county fictitious name filing, and the tax accounts are the same for an LLC, a corporation, and a sole proprietor.

The $800 annual LLC tax and the Form 568 return

Here is the California charge that catches new owners out. Every LLC doing business in California pays an annual tax of $800 to the Franchise Tax Board under Revenue and Taxation Code Section 17941. The tax is owed even if the LLC does no business at all, and it keeps being owed every year until the LLC is formally cancelled. The first payment is due on the 15th day of the fourth month after you file your Articles of Organization, and later payments are due on the 15th day of the fourth month of your tax year, which is April 15 for a calendar-year business. You pay it with Form FTB 3522.

Older guides and well-meaning friends may tell you the first year is free. That exemption covered only tax years beginning on or after January 1, 2021 and before January 1, 2024. It has expired. An LLC formed in 2024 or later owes the full $800 in its first year, on the fourth-month schedule above.

The LLC also files an annual return, Form 568. A separate LLC fee kicks in only at higher income levels: when total California income, meaning gross income plus cost of goods sold, reaches $250,000, a fee of $900 applies, rising to $2,500 at $500,000, $6,000 at $1,000,000, and $11,790 at $5,000,000 or more, estimated and paid by the 15th day of the sixth month of the tax year with Form FTB 3536. Most new beauty businesses are nowhere near those tiers, but a fast-growing salon should know the ladder exists.

Registering your business name with a fictitious business name statement

California handles business names at the county level, and this is where out-of-state playbooks mislead people. If you do business under a name that is not your exact legal name, a sole proprietor trading as Velvet and Vine Hair Co., for example, or an LLC using a shorter storefront name, you file a fictitious business name statement, often called an FBN or DBA, with the county clerk in the county where your business is principally located. There is no state registry and nothing to file with the Secretary of State for the name itself.

The timing rules live in Business and Professions Code Sections 17900 to 17930. File the statement at or within 40 days of starting business under the name. The statement then has to be published: once a week for four successive weeks in a newspaper of general circulation in the county, with the first publication running within 45 days of filing, and an affidavit of publication filed with the county clerk within 30 days after publication is complete. The statement expires five years after filing, or 40 days after any change in the facts you filed, such as a new address or a change in owners, and a no-change refile within 40 days after the five-year mark does not require publishing again.

Filing fees are set by each county and vary. Los Angeles County, as one example, charges $26 for one business name on a statement and $5 for each additional name. Budget for your own county's schedule, not a statewide number, because there is not one. Expect your bank to ask for the filed statement when you open the business account, so file it before you sign anything that uses the name.

Getting your federal Employer Identification Number

Your Employer Identification Number, or EIN, is the federal tax ID for the business, issued by the IRS. Apply directly on the IRS website and it is free; sites that charge for an EIN are selling you a form you can file yourself in minutes. You need the number before you hire your first employee, and in practice before that: most banks require one to open a business account for an LLC, and the Employment Development Department wants it when you register as an employer. Get it right after your entity filing so it never becomes the bottleneck.

California sales tax: services are not taxed, retail products are

California taxes retail sales of tangible personal property, and beauty services are not tangible personal property. Haircuts, color, facials, manicures, lash services, and massage are services, and service charges are generally not subject to sales tax. The tax shows up at the retail shelf: shampoo, conditioner, styling products, and the tools on your retail shelf are products, and when a client takes them home, that sale is taxable. Keep services and products on separate lines in your point of sale so the tax lands only where it belongs.

Before your first retail sale, register with the California Department of Tax and Fee Administration, the CDTFA, for a seller's permit. There is no fee for the permit itself, although the CDTFA can require a security deposit from some businesses. The permit is also what lets you buy your resale inventory with a resale certificate instead of paying tax on products you will resell. The statewide base sales and use tax rate is 7.25 percent, and voter-approved district taxes in your city or county add on top of that, so the rate you charge is the combined rate for your location, which the CDTFA publishes by address.

File your sales and use tax returns on the schedule the CDTFA assigns and remit the tax you collected. That money was never yours; you hold it for the state from the moment the client pays.

Hiring staff: payroll taxes, wages and worker classification

The moment you hire, California gives you a second set of accounts. Register with the Employment Development Department, the EDD, within 15 days of paying more than $100 in wages in a calendar quarter. New employers are assigned an Unemployment Insurance rate of 3.4 percent for their first two to three years, charged on the first $7,000 of each employee's wages per year. The Employment Training Tax adds 0.1 percent on the same first $7,000. State Disability Insurance is withheld from the employee's pay; the 2026 withholding rate is 1.3 percent of wages, with no wage cap. Report every new hire to the EDD within 20 days of their start date on Form DE 34.

The wage floor is the state minimum wage of $16.90 an hour from January 1, 2026. California allows no tip credit, so tips sit on top of the full wage. Many cities, including most large ones, set a higher local minimum wage, and the higher number governs. Employees must also earn paid sick leave of at least 40 hours or five days a year. Workers' compensation insurance is mandatory for every California employer, even with a single employee, and it is separate from your liability policy.

Then there is classification, the issue California is famous for. Under the ABC test from AB 5, a worker is an employee unless the business proves the worker is free from its control, does work outside its usual business, and runs an independent trade. Licensed barbers, cosmetologists, estheticians, electrologists, and manicurists have a specific carve-out in Labor Code Section 2778(b)(2)(L). When every condition in that section is met, the older Borello factors decide classification instead. The conditions are strict: the licensee sets their own rates, processes their own payments, and is paid directly by clients; sets their own hours and has sole discretion over which clients to take; keeps their own book of business and books their own appointments; holds their own business license; and, when working at the salon's location, issues a Form 1099 to the owner they rent space from. A booth renter who fails any one of these is analyzed as a likely employee, with payroll taxes and penalties to match. Board licensees also report their practice status, employee, contractor or booth renter, or salon owner, when they renew, under Business and Professions Code Section 7401, so the answer you give the state should match the arrangement you actually run.

City business licenses, zoning and the local layer

State licenses do not finish the job. Nearly every California city requires a local business license, often called a business tax certificate, for the shop and, in many cities, for booth renters and independent practitioners working inside it. Fees and renewal dates are set by the city. Zoning has to allow a personal services business at your address before you sign the lease, and your buildout may need building permits, plumbing or electrical sign-off, and a certificate of occupancy. Signage usually needs its own approval. If you plan to work from home, check the city's home occupation rules as well; some services and client traffic are restricted in residential zones.

Do the local check before the state paperwork, in this order: zoning confirmation for the address, the city's business license application, then the buildout permits. A state license package does not help if the city will not let the business operate on that block.

Insurance and the costs that keep coming back

Plan on three policies at a minimum. General liability covers client injuries in the space, like a slip on a wet floor. Professional liability covers claims arising from the services themselves: a color reaction, a chemical burn from a lightener left on too long, or extensions that damage a client's natural hair. Property coverage protects your equipment, furniture, and retail stock, and business interruption coverage can keep the business alive if a fire or flood closes you for a month. Workers' compensation, covered above, is mandatory once you have employees and is priced separately. If you rent booths or suites, your lease and your policy should both say clearly whose insurance answers first when a renter's client is hurt, and renters should carry their own professional liability policy naming their own business.

Premiums vary by city, services, and claims history, so compare quotes from brokers who write beauty industry policies and compare the exclusions, not just the price. Add the recurring state stack to the same budget: Board renewals every two years, the $800 LLC tax every year, the $20 Statement of Information every two years, and county and city renewals. None is large alone; together they are a real line in your budget, and calendaring them in advance is how owners avoid delinquency fees.

Dates to put on your calendar

• Every two years: renew practitioner licenses with the Board for $50, and the establishment license for $40, before the expiration dates printed on the licenses.
• 15th day of the fourth month after filing, then every year: the $800 LLC tax to the Franchise Tax Board on Form FTB 3522, April 15 for calendar-year businesses.
• Every two years: the LLC Statement of Information, Form LLC-12, $20 with the Secretary of State, first due within 90 days of formation.
• On the CDTFA's schedule: sales and use tax returns and payment for retail product sales, at the filing frequency the CDTFA assigns.
• Within 20 days of each hire: new hire report to the EDD on Form DE 34.
• Every five years: renew the county fictitious business name statement, and refile within 40 days if your address or ownership changes.
• Every year: renew your city business license on your city's schedule.

This guide is general information researched from official California sources, not legal or tax advice. Requirements, fees and forms change; verify the current rules with the agencies linked above before you file, sign or spend.

Frequently asked questions

Do I need a cosmetology license to own a hair salon in California?

No. Under Business and Professions Code Section 7347, any person, firm, or corporation can apply for an establishment license, so you do not need a practitioner license to own the salon. What you cannot do is provide services yourself without one. Every hair service in the salon must be performed by a licensed cosmetologist, barber, or hairstylist working inside the scope of their license, in a licensed establishment.

How many hours of school does a California cosmetologist need?

A cosmetology course runs 1,000 hours or more at a Board-approved school under Business and Professions Code Section 7362.5. Applicants must be at least 17 and have completed the 10th grade. Since January 1, 2022, there is no practical exam: candidates pass a written exam only. State fees are a $9 preapplication fee, a $75 application and examination fee, and a $50 initial license fee.

How much does a California salon establishment license cost?

The application and initial license fee is $50, renewal is $40, and the delinquency fee is $20, under 16 California Code of Regulations Section 998. The application is the Board's Form 1020, and the $50 application fee is nonrefundable. The license covers one address, so a salon that moves or a buyer taking over an existing salon applies through the same form.

Are hair services subject to sales tax in California?

Generally, no. California taxes retail sales of tangible personal property, and haircuts, color, and styling are services, so service charges are generally not taxable. Retail products are taxable: shampoo, conditioner, and styling products a client takes home are charged the 7.25 percent statewide base rate plus your local district taxes. Register with the CDTFA for a seller's permit before your first retail sale; there is no fee for the permit.

Why does my California LLC owe $800 before it makes any money?

Every California LLC pays an annual tax of $800 under Revenue and Taxation Code Section 17941, owed even if the LLC does no business, until the LLC is cancelled. The first payment is due on the 15th day of the fourth month after you file your Articles of Organization, paid with Form FTB 3522. The first-year exemption people remember applied only to tax years beginning in 2021 through 2023 and has expired.

Can my stylists be booth renters instead of employees?

Yes, if the arrangement genuinely meets every condition in Labor Code Section 2778(b)(2)(L): the stylist sets their own rates, processes their own payments, is paid directly by clients, sets their own hours, controls their own client selection and book of business, holds their own business license, and issues a Form 1099 to you as the owner they rent from. When all conditions are met, the Borello factors decide classification. Miss one, and the ABC test applies, which treats most salon renters as employees.