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Your band's earnings: how do you allocate it?

Discussion in 'Miscellaneous [BG]' started by Rockin John, Feb 22, 2002.

  1. Not so much the percentages per member, but the more basic idea of whether it's shared at all or whether it's kept in the name of the band for buying kit or whatever.

    Here's the senario. As a new band, as yet to earn money, we were discussing the above concept because it has wider financial implications, viz income tax, motor insurance and the like.

    We've decided to keep proper records and properly declare earnings to the tax authorities. If we do that as a band we might not be liable as individuals for income tax (any tax inspectors on the board :eek:?)

    On the motor insurance front, if we don't individually earn we can legitimately say we've not a part time job in entertainment so maintain motor premiums at current levels (any insurance clerks on the board :D ?) Entertainment is a high risk area in UK for motor insurance so premiums go sky high.

    The down side is, of course, that we couldn't legitimately take any of those earnings for personal use.

    Any wisdom guys?

  2. Nope no words of wisdom yet - just that I'm very interested in the information coming back on this topic too!!!!
  3. brianrost

    brianrost Gold Supporting Member

    Apr 26, 2000
    Boston, Taxachusetts
    Tax implications will vary depending where you live. To dodge taxes here in the US, you need to incorporate the band then the members become employees of the corporation.

    In the UK or elsewhere, who the heck knows...see a tax professional or lawyer.

    What I do personally is file taxes as an "independent contractor", basically self employed. I claim the gross income from gigs and then can deduct a wide range of professional expenses: depreciation on gear, repairs, lessons, laundry of stage clothes :cool: , mileage deduction for the car, tolls and parking fees, etc.

    It can be sobering to see the numbers. I played almost 200 gigs last year and after all expenses I made about $300 profit :(
  4. Bruce Lindfield

    Bruce Lindfield Unprofessional TalkBass Contributor Gold Supporting Member

    Well - this question has been the subject of many band meetings - we all have other jobs and there are about 13/14 in the band! Forunately, one of these people is a retired accountant who acts as treasurer.

    I can't rememeber the history of all the discussions (I was probably eating/drinking/asleep!) but we decided to keep all the money in a fund - we have use dthis to buy our own PA and to commission original works and arragments by composers as well as workshops with professionals in the field - i.e. experts in Brazilian, Afro Cuban music - next one is pianist & bandleader Alex Wilson who won best newcomer award in the Radio 3 Jazz awards!

    So we have also used the money - running into many thousands of £ now - for parties and band meals. We have also agreed to pay out a small dividend to cover expenses every quarter.
  5. jasonbraatz


    Oct 18, 2000
    Oakland, CA
    phat phunktion is a limited liability corporation, and the band is all employees in it.

    every gig that the band has, we take half the money and put it in our account towards insurance on the vans, rent on the studio, etc. and the other half gets divided by 9 and that's what i get!

    the band's been around for a long time - so we have pretty much everything that we need. instead of owning a PA, we use a sound company if the venue doesn't provide sound, it's never been a problem. we do have a tiny little peavey pa for the studio though!

  6. PJR


    Jun 20, 2001
    N.E. PA
    We split the earnings evenly........

    Cash is King ! ;)

  7. NioeZero


    Sep 2, 2001
    Earnings? :confused:
  8. Brendan


    Jun 18, 2000
    Austin, TX
    yeah...band earnings...all $40 of it (aka $10 per band member) per show, or less.
  9. hujo


    Apr 18, 2001
    Stockholm, Sweden
    We split it up all the way.. Whatever we get paid is split equal.
  10. Well we're a small time covers band, but our working members do declare the gigs to the taxman - you'll find many places will ask you to sign for the money - so you're traceable.

    Provided you keep investing the money back towards new equipment, then at our level at least, you don't earn a great deal and the taxman will hopefully look kindly on you!

    We share all our earnings equally but sometimes deduct money for things like adverts if necessary.

    If you're planning on making your living out of music it might be a different deal. I know for example, insurance for your car is likely to be more expensive if you are a professional musician.
  11. My band keeps all expenses to use solely for the production of albums. All equipment is purchased seperately by the individuals in the band who need it.
    All touring expenses are paid straight out of our pockets.
  12. Bruce Lindfield

    Bruce Lindfield Unprofessional TalkBass Contributor Gold Supporting Member

    Funnily enough, in the band I was talking about we were hoping we woudn't make a profit, as we all have other jobs and didn't want to be bothered with the tax implications. But we found that unless we asked the "going rate", people didn't take us seriously - we started off doing gigs for charity events, but found there weren't enough to keep us busy. So we have ended up charging £750 - £1,000 per gig and now have to have big meetings about what to do with the money! ;)

    So we find that if we spilt it 13 or 14 ways it wouldn't be that much each and we would have all the hassle of declaring it for tax and squaring that with our main employers. But if we pool all the money it is quite substantial and we can actually do something with it - like buying a p.a. , commissioning songs arrangements etc.
  13. Good morning guys and gals, and hello from a damp, wet, miserable, misty, cold, etc, etc, England.

    First off, thanks for the replies.

    There's no intention to view the band as anything other than a hobby: we're not star-struck teenagers anymore;). But it's clearly possible to make some money from occasional playing after deducting every morsel that the tax people allow as per Brianrost's $300 from 200 gigs :D.

    We've decided to declare everything, Bassbarbie, and the guitarist's said the band can use his accountant if we want (had to smile at him: when did an accountant last turn down the chance to make some more money ;) ?)

    Anyway, it's the car insurance thing that bothers me the most....it bothers me a very great deal to be honest. Does any UK TBer have any information for me about how/where to get such insurance for this purpose or any other info on this subject. PM me if any reply is not for the public board.

    Thanks V much.

  14. Bruce, does that mean you don't take money personally from playing? And, if not, how do you regard your musical ststus: are you, therefore, by definition an 'amateur' because you're not getting paid?

  15. Bruce Lindfield

    Bruce Lindfield Unprofessional TalkBass Contributor Gold Supporting Member

    I am most definitely an amateur in every sense of the word! ;) I see it that when I am using my car to transport gear for a gig, it is just like somebody pursuing their chosen hobby - I could be going to an Air Show or a football match - well that's all the insurance company needs to know anyway!

    Actually, having now had quite a bit of experience of being treated as a "professional" at things like wedding gigs in big country houses, I am very glad that I am not a professional musician as I fear I would lose any gigs through speaking "out of turn"!

    It hasn't always been the case and there are good and bad, but on some gigs I have been made to feel like the hired help and no better than somebody who came to clean the toilets! :(

    I am glad that I don't have to make my living in this way and that in my day job I am treated as an "expert" as well as a manager who deserves respect.

    To go back to John's original question - no we don't really pay ourselves, but we do get a lot out of the money - more, in my view than if we just split everything. We have paid out expenses for petrol and for meals - plus we have had this "dividend" idea - last one was about £50 and we saw this as less than what we could consider legitimate expenses in terms of wear and tear on gear etc.

    So If anybody "official" asks - we are amateurs - but we do have professional standards in everything we do! :)
  16. Guys one thing that I'd like to point out - and I learned it the hard way!

    Our band has never been paid for a gig - our last one was a charity gig. I have never mentioned anything to my isnurer as part of a part time job or anything like that.

    Last year whilst returning from a rehearsal, my car was rear-ended by a car thief in a stolen car who managed to get away and dump the car.One of my basses was in the bott of my car and was trapped their - lost forever I thought. With some careful manipulation we got it out - but the case was destroyed.

    The car was written off - the bass case with it. I inquired about claiming for a CD player (sony walkman type ) that was stolen from the car between me being taken to hospital and the wreck arriving at my front door. I was told that would be a separate claim. I enquired about the bass case and they agreed to pay.

    The limit I was given was £100!! Fortunately the case cost less than this - but if the bass was also smashed, it would be a case of tough luck! I don't know if you guys have investigated how much your insurance covers - but personal effects in my car with this policy is only worth £100. That would not have come close to covering the Trace Elliot head and cabinets and my two Spectors that I took to the last gig!

    Be careful out there!
  17. Bruce Lindfield

    Bruce Lindfield Unprofessional TalkBass Contributor Gold Supporting Member

    I have specialist musical intrument insurance which covers me for several thousands of pounds worth of gear - the only thing that isn't covered is "theft from an unattended car" - so I would have got compensation for what Johny describes. But of course I had my car broken into and an EA cab worth over £700 stolen - for which I got nothing! :(

  18. KB

    KB Supporting Member

    Jan 13, 2000
    Chapel Hill, NC
    We take our band's "earnings" (Tips, door, etc.) and put it back into buying general stuff for the band (studio time, cables, mics, CDRs, etc.). Since we get paid in cash (so far) the taxman is not an issue :D

  19. A blatant untruth, sir;)

    My understanding of the car insurance thing is that if there's no personal earnings then there's no second job to tell an insurance company about. I was told by one insurance broker that companies are unlikely to favour their clients going out playing, but that they can't stop people, of course.

    The reason insurance companies charge much more for motor insurance for is interesting. And I've been told this twice by two different insurance brokers. It's in case you meet someone famous, give him/her a lift, have an accident and the person sues the insurance company for loads of millions of ££:rolleyes: :eek: :rolleyes:

    I guess they haven't assessed the risk of someone famous turning up in some of the pubs I've seen bands playing in........

  20. embellisher

    embellisher Holy Ghost filled Bass Player Supporting Member

    In the oldies band, whoever gets the gig gets 10% off of the top. Then the singer, bassist, drummer and guitarists all get a full share. The chick singers each get a 1/2 share.

    We get paid in cash. I've never reported, but if I did, I am such a GASaholic that it would be a wash. I wouldn't owe any taxes. I would probably run at a loss.