We have hundreds of clients all over the world, and many of them want to know how to pay personal trainers. What’s a good personal trainer salary, rate or wage? How do I compensate people properly without compromising my business?
We have answers based on data, and we hear this line of reasoning far too often:
“If I incentivize my coaches to do more personal training, they’ll go out and find the clients, do whatever it takes to keep the clients, and make enough money to stick around my gym. They might even coach my CrossFit groups for free!”
It’s a myth that many gym owners have fallen for: the sticky story that staff just need to be motivated and that money is the missing motivation.
This is rarely true.
Common Issues in the Fitness Industry
As gym owners flock to Two-Brain Business mentorship from other programs, our team of mentors hears things like this more and more often:
“My coaches keep 70 percent of the personal training rate, so I need to focus on getting clients into groups to keep the gym profitable because I don’t make any money on PT.”
“My coaches are paid to find clients for 1:1 training, but they don’t know how. They blame me, but isn’t it their job to figure it out?”
“Some of my trainers are pretty good at keeping clients around. But one or two are really bad at it. How do I fix that?”
“I paid my training staff 70 percent of my PT revenue. Now my gym is failing fast, but the trainers won’t change their ratio!”
These are significant problems in a business. They can even be fatal.
Below, I’ll explain where the 70 percent number came from and then tell you how you can create a personal trainer salary or wage that benefits both the business and the trainer.
Personal Trainer Salary and Rate: Industry Standards
Most gyms in the fitness industry pay their coaches around 25 percent of the revenue they generate.
Industry surveys and reports show that while gyms charge premium rates for PT, they pay their staff close to minimum wage.
One of my favorite things about owning a gym is that I don’t have to stick to that model.
We’re counterculture, and pay our coaches more because we want professionals. But many gyms have gone too far in the wrong direction: They pay coaches up to 70 percent of their personal training revenue. And, ironically, they charge less for personal training than any globo-gym. That means their net personal training revenue is pretty close to zero.
Big gyms don’t make this tragic mistake. Even non-CrossFit microgyms don’t fall into this trap.
So why does this weird ratio plague only CrossFit gyms?
Why doesn’t this model work?
And what’s the danger to coaches and owners?
Where Did the 70 Percent Trainer Wage Come From?
Paying coaches 70 percent was an idea that wasn’t based on math or science.
It was just an in-your-face play against the globo-gym practice in the late 1990s.
But it turned out to be a “cut off my nose to spite my face” practice for gyms who used it. Many who used it are gone, and others who still use it are struggling.
Why Doesn’t a 70 Percent PT Rate Work?
You sell exercise coaching.
Some of your clients want to be coached in a group setting. Some want to be coached one on one.
Personal training isn’t a bonus. It’s not a supplement to your group coaching business. It’s your core business.
In fact, the best gyms approach group training as personal training in a group setting. They don’t approach personal training as “extra work for group members.”
Paying coaches 70 percent of personal training revenue means there’s barely anything left over to cover other staff costs and overhead expenses. This is fact.
Out of the remaining 30 percent share, here are just a few of the many things the owner is responsible for:
- All overhead expenses (including rent, heat, lights, water)
- Bank fees
- Payment processing fees (about 3 percent)
- Supporting materials
And that’s the short version of the list. You can imagine all the other things that add up fast—websites, accounting, etc.
Thirty percent is just not enough to cover it all.
“Do You Mind Mopping for Free?”
To make up for the shortfall, most gyms paying their coaches 70 percent also force them to perform non-coaching duties. Thirty percent just can’t cover all the expenses, so someone has to make up the difference.
Here’s the problem:
- These little “extras” are unpaid.
- Most coaches aren’t good at the extras, such as calling clients or cleaning the gym.
- Coaches are incentivized to keep a “coach for life” relationship with the client, instead of a “gym for life” relationship. What happens to the gym if the coach leaves?
All this means the gym owner has set the coach up at the expense of his or her own income.
Suddenly staff is a huge, crippling expense instead of the asset it can be in the right system.
The Danger of the Wrong Rate or Salary
Many gyms that pay their coaches 70 percent of personal training revenue are struggling. We know this because we see their data, and we help them make changes to survive and then thrive.
The coaches in 70 percent systems do well—of course!—but the owners don’t.
So a struggling owner burdened with excessive personal trainer salaries and wages has two choices. Both are bad.
1. Replace the coach personally to make money. This moves the owner in the wrong direction. Instead of moving to growth roles that will create a sustainable business for the owner, the clients and the staff, the owner is back to delivering services on the front line. The gym will never grow if an owner is forced to do that.
2. Shut the doors. There are no winners here. The clients lose their gym, the owner loses a business, and trainers lose salary and income.
In either case, the coach loses long-term.
The lesson: 70 percent of zero is zero.
Paying Trainers and Coaches: The Real Percentage
Accountants for service industry businesses broadly agree that wages should be 44 percent of gross revenue—or less. Usually less.
Greg Crabtree, author of “Simple Numbers,” calls this Labor Efficiency Ratio. Mike Michalowicz, author of “Profit First,” puts the number higher (50 percent) but includes the owner’s pay in that number because many service businesses are owner-operated.
But that’s not possible when your small gym is open 16 hours every day and you’re selling recurring memberships.
So how does the owner keep wages to 44 percent or less?
There are several ways. One is the 4/9ths Model, which incentivizes staff to grow and leaves the responsibility for client recruitment and retention on the owner—where it belongs.
I wrote about the 4/9ths Model at length in “Two-Brain Business 2.0,” and you can watch a short summary here:
Another route: Set your pay rates off your previous year’s earnings. But it’s very hard to change your pay rates every year.
A third way: Set your wage rates so low that you’ll always be under 44 percent. That’s not my favorite, but it would work.
Each of these options is better than what most gym owners do—which is copy what everyone else is doing.
If you’d like more info on pay structures and career building, download the free 23-page Two-Brain Business ebook “Intrapreneurialism 101: How to Pay Your Coaches $80k a Year Without Bankrupting Your Gym.”
How to Correct the Deadly 70 Percent Error When Paying Trainers
You need to look at your data and financials. You absolutely have to.
When you carefully evaluate your income, expenses and profit, you’ll often find some huge holes in the boat—the kind of holes that can sink it fast.
We see these issues regularly, and we know how to identify them and correct them. Often, we find that out-of-control wages are crippling the business and changes are needed to save it.
So what if you’ve been paying your coaches 70 percent of personal training revenue but now realize it’s killing your business?
You need to make swift changes based on data.
Changing Your PT Salaries or Wages
Here are some of the methods our mentors use to save gym owners:
1. Know your ratios but talk in dollars. Your coaches don’t have any context for what it takes to run a business. They don’t actually care about percentages; they care about benefits. Tell them what you’ll pay them in dollars. But base those amounts on the percentages that are needed to create a healthy business.
2. Work backward from the trainer’s Perfect Day income. At your quarterly Career Roadmap meetings, show each trainer the path to make the income he or she wants. Again, talk about dollars instead of ratios. (Click here for more info on Career Roadmaps.)
3. Show them your plan to increase the number of personal training clients. Most coaches will understand that they’re better off having several clients you provide than having none because they don’t know how to get them. Coaches almost never have systems for marketing, acquisition, intake and retention. But the owners do—and these systems are incredibly valuable.
4. When all else fails, allow the coach to keep current clients at 70 percent until they cancel or ask to pause their membership. Then make the change. This isn’t ideal for the business, but a transition like this is sometimes needed.
Salaries, Wages and Rates: No Myths, No Legends
You’ll hear a lot of business experts throwing numbers around. We won’t.
We’re just going to tell you that we’ve spent thousands of hours researching income and expense ratios. We’ve spent thousands of additional hours digging into real gym financials.
We’re not working off fictional spreadsheets or made-up scenarios. We’ve seen mountains of data from gyms all over the world, and we know that paying trainers 70 percent of income is unsustainable.
We’ve also seen what happens when a gym gets the correct pay rates in place and then works with staff members to create careers:
The staff members start making reliable, desirable incomes inside a stable business that’s full of opportunities for growth.
At that point, staff members are happy. Clients are happy. And owners are happy because the staff isn’t a crippling expense. It’s an asset that will generate more income—for the business and the trainers themselves.
Remember: 70 percent sounds great. But when the business collapses, 70 percent of zero is zero.
If you’re struggling, click here to book a free call with a certified Two-Brain Business mentor.