Are you overpaying or mispaying?

This week I had the same conversation with four different studio owners. Different studios, different numbers, different team, but underneath it, the exact same problem. And every single one of them was convinced it was about money. Is this number too high? Can I afford this? Am I paying too much?

Here's the deal: the number was never the problem.

If payroll hits every month and it hurts every month, this one's for you. Because overpaying your team has very little to do with the dollar amount on the check and almost everything to do with a thought you don't even realize you're having. Let's get into it.

What does "overpaying" actually mean for a studio owner?

We tend to think overpaying means handing someone a big number and underpaying means handing them a small one. That's not it.

Overpaying is a mismatch. It's when what you're paying doesn't line up with the work that's getting done or with what that work is actually worth to your business. It's paying for a title when someone's completing tasks. It's paying for a role you're not even fully using yet. Sometimes it's paying for a feeling instead of a result.

And here's the proof it's not about the number: you can overpay someone $800 a month, and you can underpay someone $5,000 a month. Same dollars. Different mismatch. The gap between what you pay and what you get back that's overpaying. Full stop.

How much should payroll be for a yoga or Pilates studio?

Before we go deeper, let's look at the data, because this is the benchmark I teach inside my programs:

Your payroll should sit between 20% and 35% of your overall monthly revenue.

If you're paying your team more than 35% of what you bring in every month, your payroll expense is probably too high. One important note — this number does not include your own salary, so pull that out before you do the math.

This is a generalization, because I'm talking to you through a podcast and I can't see your specific P&L. But go look. Pull your average monthly payroll, divide it by your monthly revenue, and see where you land. That single number tells you a lot.

Why do studio owners overpay their team?

The gap between what you pay and what you get doesn't come from the number. It comes from a thought. And with those four owners this week, that thought showed up five different ways. See which one sounds like you:

1. Fear. "It won't happen without paying them this much." Picture an owner giving away 60, 70, 80% of her teacher training revenue to the person leading the training while she markets it, sells it, and provides the studio. She's keeping 20 cents on the dollar because the fear says, "I'd rather have 20% of something than 100% of nothing." But teaching at a thriving studio is in demand. Leading a training is a dream for so many people. That fear convinces you that you have no leverage and that's simply not real.

2. The rescue fantasy. "I'll hire someone and they'll grow my revenue for me." I had to be honest with this client: a great hire usually frees up your time, not your revenue. Unless you're specifically hiring a sales role or a business manager whose job is to bring money in, most hires hand you hours back not clients. When you get that time back, you go market, sell, and deliver as the CEO. That's how the revenue grows.

3. Guilt. This industry is full of heart-centered people, so this one's common. You don't want to overwhelm anyone, underpay anyone, or micromanage so you end up overpaying and under-delegating. You pay someone a real salary but keep all the tasks, all the thinking, all the decisions. You've got a manager on payroll doing work an assistant could do, because you feel guilty asking for more.

4. Safety. "If I just pay this person full-time, the weight comes off my shoulders." That's paying for a feeling the feeling of being taken care of. But full-time does not equal committed. You can pay someone part-time and they're fully invested. You can pay someone full-time and they're barely there. The real question is what your revenue can actually support right now.

5. Authority avoidance. This is the quiet one underneath all the others: "Who am I to set a rate and hold an expectation?" Someone tells you what they want to be paid, you know it's more than you can do and instead of saying "this is the role, this is the rate, this is the expectation," you just pay it. Because overpaying feels easier than standing in your authority as the owner.

What is overpaying really costing you?

Here's the part I need you to hear. Mispaying isn't just draining your bank account, though it absolutely can.

The deeper cost is this: your business can't grow, because you're spending real money to stay exactly where you are. You start to fund your own avoidance. You become the bottleneck of your own company. And worst of all, it keeps you locked in employee brain — and a business run from employee brain has a ceiling.

This is the difference between employee brain and CEO brain. And here's what surprises people: the CEO brain feels every single one of these feelings too. The fear, the guilt, the flinch when it's time to negotiate a rate. The CEO brain isn't fearless. It just sits in that upper seat one beat longer — and strategizes instead of paying to react.

How do you lead through a pay conversation instead of overpaying?

The shift is leading through every pay-rate conversation instead of flinching past it. Here's what that looks like:

• Get clear on the role. Not the title; the role.
• Write down the actual deliverables. What does this person own?
• Set the expectations out loud. From the very start, not six months in.
• Match the pay to the potential outcome, not to the feeling you're chasing.
• When you genuinely don't know what the rate should be or whether the role should be full-time or part-time, that's your cue to get support, not to overpay your way out of the discomfort.

That's the path to the right-size team, payroll that sits in that healthy 20–35% range, and a business that runs without you stressing over every dollar and every decision. That's working on your business instead of in it.

Your next step this week

Don't close this tab without doing the work. Ask yourself, honestly:

• How much is my payroll right now, and is it inside that 20–35% range?
• Where might I be overpaying for what I'm actually getting?
• Is fear, guilt, or the need to feel safe quietly driving what I pay?

Name it. Be honest with yourself. That's the CEO move.

This is exactly the work we do inside the Studio CEO Program and the Grow Mastermind, matching what you pay to what your business actually needs, building real profit, and becoming the leader you have to be to run the whole thing. If payroll hurts every month, or you know you need to hire but you're not sure what to pay, I'd love to talk. Come find me on Instagram @studioceoofficial, and I'll see you in the next episode.