Compensation Levels For Models:
Trade For Portfolio Images: Models, makeup artists, hairstylists and photographers (in the "industry") sometimes "trade" each other's talent to produce quality imagery for their portfolios. Ethically, this does not mean that one can use such images to "advertise" their salon services through e-blasts, direct mail and ads. For a salon owner, such trades generally apply only to personal portfolio use. Use clear communication in negotiating this type of trade with models, makeup artists and photographers and respect the original agreement made between all parties.
Trade For Services: Salon services can be "traded" for modeling services. When booking a model for traded services use clear communication about the dollar value of the services traded by all parties. It is always best to have a mix of trade and cash for important photo shoots so that the model is motivated to give a good performance during the shoot. When models feel under compensated, a bad attitude can produce inferior images.
Financial Compensation: Model fees are negotiated according to the "use" of the images. When dealing with modeling agencies, national advertising is always more expensive than regional and the amount of times the image is used and the "term" of the agreement is generally discussed so that fees are negotiated accordingly. Be specific when negotiating for a model. If you only want the use of the images for e-blasts and your web site, lower fees can be negotiated. "Unlimited use" always raises the model fee when working with agents, so it's best to spell out the use to get the best terms.
Note: Legally, the photographer "owns" the rights to the image, but needs permission from all models through a signed release. To find out more about model and photographer releases search online for example forms.