Step 10 - Sponge the hair

There will still be some slight outlines around fine details such as the hair. Use the Sponge tool on desaturate mode and paint carefuly on the edge. Because the hair is usually not completely grayscale (black hair has some browns in it), you want to be careful not to over apply the sponge tool. Work only on the edge and zoom in so that you can be more precise.

If you're working on hair that's not black, create a new Hue/Saturation adjustment layer, check mark colorize, and adjust the settings to match the hair color. Then, click on the Hue/Saturation layer mask, press Ctrl+I to invert, and paint the affected areas with white.

Step 11 - Match the two layers

The mask is perfect now, but we're not quite done. This final step is one that many people forget and it is the most important step to make it look real. That is to match the brightness, contrast, and saturation with the background image. Add the appropriate adjustment layers but don't edit the settings yet. For the image I used, the saturation is fine so I will just add a Brightness/Contrast adjustment layer to fix the brightness and contrast.

Once you have the adjustment layer, you need to create a clipping mask so that it only affects the layer below. To do this, press Alt+Ctrl+G and it will create a clipping mask that will only affect the shape of the layer below and not the background.

Once you've done that, adjust the settings so that it matches the background. For example, the background I used has higher contrast and brightness. I will increase the contrast and brightness to match the background so that they blend in.