Music Business Essentials




Employment
Arrangements
in the Music Business



                             © 2006 musicbi...
Financial Literacy in the Music Industry

• Two Certainties: Death and Taxes

• It is not what you make, but what you keep...
In the Music Industry,
              Industry
there are different
employment arrangements:

 –E l
  Employee-- F ll or P t...
Full or Part-Time Employees

• Long-term, continual work; paid
  wages or salary

• At Will; employer or employee may
  te...
Contract Employees:

• Mid to Long term continual work;
  Mid-to Long-term,
  paid wages or salary

• Contract period pre ...
Independent Contractor

• Sh t t
  Short-term, sporadic work; paid f
                   di     k    id fees

• Self-Employ...
(Small) Business Owner:

• Not hired for employment; rather hired
  to provide services via own business;
  paid fees and/...
Business vs. Hobby
• The IRS differentiates between
  Businesses and H bbi
  B i            d Hobbies

• Tax status is dif...
A Band/Group as a business:

• Separate business entity:
  Typically a Limited Partnership
   yp     y                    ...
Paying Your Taxes:

• IRS- Internal Revenue Service
1040.Com
1040 Com

• Federal, State, Local taxes may be due

• Annual ...
General Tax Filing Info:
• All eligible U S citizens pay annual
               U.S.
  earned income taxes
• Regardless of ...
General Tax Filing Info:

• All eligible U.S. citizens who earn income
  from any self-employment activities pay
  additio...
Unions and Guilds
for the Musical Arts
and Trades




                       © 2006 musicbizclasses.com
Brief History of Labor Unions
• G ild d t b k t th Middl A
  Guilds date back to the Middle Ages-
  a confraternity of tra...
Musician’s Unions:
Overview
O    i

• Today there are several unions
  and guilds that serve the interests
  of profession...
Unions for Musical Artists:
• AFM= the American Federation
  of Musicians of The United States
  and Canada

• AFM is the ...
Unions for Musical Artists:
AFTRA=
American Federation of Television
and Radio Artists

• Primarily concerned with
  vocal...
Guilds for Musical Artists:
SGA=
Songwriter s
Songwriter’s Guild of America

• Primarily concerned with
  Songwriters, pub...
Musician’s Unions:
Benefits
• The primary mission of a union is
  to protect musicians, performers,
  artists in terms of ...
Musician’s Unions:
Benefits
• Collective Bargaining uses
                 g     g
  the power of many members
  to gain wo...
Union Contracts
• Companies that sign contracts
  with unions become union “signatories”

• They agree to honor union rule...
Musician’s Unions:
Benefits
• Unions allow members
  “employee”-type benefits
  “   l      ”t   b   fit

• Including:
  – ...
Musician’s Unions:
Requirements
• Requirements:
  – One time joining fee-
    g
    generally $100-$1000
            y
  –...
Musician’s Unions:
Pros and Cons
 PROS-
 – Off Protection and benefits
   Offer P t ti     db    fit
 – Larger venues and ...
Key Take-Aways:
• Unions and Guilds are meant to
 protect workers from poor working
 conditions and abuse by employers

• ...
Key Take-Aways:
• Unions are membership organizations
 and require members to pay joining fees,
 annual membership fees an...
For Educational Use Only


  This slide presentation is part
of the Music Business Essentials
              series.



   ...
Upcoming SlideShare
Loading in...5
×

MUC 109 LEC 3 Employment Arrangements & Unions

1,212

Published on

Employment and Unions in the Music Industry

Published in: Business, Economy & Finance
0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
1,212
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
0
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide

MUC 109 LEC 3 Employment Arrangements & Unions

  1. 1. Music Business Essentials Employment Arrangements in the Music Business © 2006 musicbizclasses.com
  2. 2. Financial Literacy in the Music Industry • Two Certainties: Death and Taxes • It is not what you make, but what you keep • Your number one expense in life: TAXES • Long-Lasting, wealth is determined by both revenue generation and tax management strategies • Business Ownership offers the most tax advantaged income and tax position © 2006 musicbizclasses.com
  3. 3. In the Music Industry, Industry there are different employment arrangements: –E l Employee-- F ll or P t Ti Full Part-Time or Contract – Independent contractor – Small Business Owner © 2006 musicbizclasses.com
  4. 4. Full or Part-Time Employees • Long-term, continual work; paid wages or salary • At Will; employer or employee may terminate at any time • Conditions set by employer • Tax withholding by employer • Unemployment benefits Worker’s Comp benefits, Worker s & Disability Examples- Examples Regular jobs at a recording studio, record label, etc. © 2006 musicbizclasses.com
  5. 5. Contract Employees: • Mid to Long term continual work; Mid-to Long-term, paid wages or salary • Contract period pre determined and pre-determined mutually agreed upon by employer and employee • C diti Conditions set b signed contract t by i d t t • Employment may end when contract p y y period is expired • Tax withholding by employer g y p y • Unemployment benefits; Worker’s Comp Examples: Regular jobs on Broadway, in TV shows; employee band member © 2006 musicbizclasses.com
  6. 6. Independent Contractor • Sh t t Short-term, sporadic work; paid f di k id fees • Self-Employed; freelance • At Will • Conditions set by mutual agreement; may or may not have a formal contract • Taxes managed by employee • N unemployment b No l t benefits, W k ’ fit Worker’s Comp or State disability Examples: Session gigs, short-term projects as engineers, arrangers, music instructors, etc. © 2006 musicbizclasses.com
  7. 7. (Small) Business Owner: • Not hired for employment; rather hired to provide services via own business; paid fees and/or sales income • Conditions set by mutual agreement; may or may not have a formal contract • Tax withholding & benefits handled by business entity • Examples: Owners of recording studios, record labels, labels record/music stores artist management stores, companies. © 2006 musicbizclasses.com
  8. 8. Business vs. Hobby • The IRS differentiates between Businesses and H bbi B i d Hobbies • Tax status is different for both • Both require income tax reporting • Business= Profit Motive • Hobby= For Fun • 3 out of 5 tax years profitable? Business. • Not profitable? Hobby. • Tax advantaged status for Businesses – Deduction of expenses against business income – This REDUCES your income tax bill © 2006 musicbizclasses.com
  9. 9. A Band/Group as a business: • Separate business entity: Typically a Limited Partnership yp y p (Band Partnership) or LLC • Paid fees, royalties and fees sales percentages • Band/Group Members own equal shares in profits and losses of the business • LLC and Limited Partnerships offer p greater protection against personal liability © 2006 musicbizclasses.com
  10. 10. Paying Your Taxes: • IRS- Internal Revenue Service 1040.Com 1040 Com • Federal, State, Local taxes may be due • Annual Income taxes on Earned Income- Due April 15th each year • Self-Employment Taxes on self-employed Self Employment self employed income- Estimated payments due throughout the year © 2006 musicbizclasses.com
  11. 11. General Tax Filing Info: • All eligible U S citizens pay annual U.S. earned income taxes • Regardless of age • Filing amount is determined by several factors: filing status income amount status, amount. • Example: Single, Under 65, Earned income of $8950 (2208) or more must pay annual earned income taxes • Example: Dependent children under 19 children- (up to 24, if full-time student); earned annual income $5450 (2008) or more ( ) must pay annual earned income taxes © 2006 musicbizclasses.com
  12. 12. General Tax Filing Info: • All eligible U.S. citizens who earn income from any self-employment activities pay additional self-employment taxes dditi l lf l tt • Regardless of age • Earned income from self-employment of $400 or more must pay annual self- p y employment taxes. • Talk to your CPA- Certified Public Accountant for more information © 2006 musicbizclasses.com
  13. 13. Unions and Guilds for the Musical Arts and Trades © 2006 musicbizclasses.com
  14. 14. Brief History of Labor Unions • G ild d t b k t th Middl A Guilds date back to the Middle Ages- a confraternity of tradesmen • Historical Guilds are predecessors to many of today’s Unions and Guilds y • Modern unions in America first emerged during the industrial revolution of the mid-to-late 1800’s • Their primary mission was to protect workers against the abuses of the powerful industrialists © 2006 musicbizclasses.com
  15. 15. Musician’s Unions: Overview O i • Today there are several unions and guilds that serve the interests of professional performing artists f f i l f i ti t and supporting trades-people. • They are membership organizations and charge j i i and annual f d h joining d l fees • Operating on a Federal and Local Level © 2006 musicbizclasses.com
  16. 16. Unions for Musical Artists: • AFM= the American Federation of Musicians of The United States and Canada • AFM is the oldest and largest professional musicians union • AFM f focuses on supporting ti practicing musicians in live performances venues touring and venues, recording sessions and TV taping © 2006 musicbizclasses.com
  17. 17. Unions for Musical Artists: AFTRA= American Federation of Television and Radio Artists • Primarily concerned with vocal talent- Background singers, announcers, etc. © 2006 musicbizclasses.com
  18. 18. Guilds for Musical Artists: SGA= Songwriter s Songwriter’s Guild of America • Primarily concerned with Songwriters, published and unpublished • Offers multiple benefits- provides a standardized contract template for songwriters © 2006 musicbizclasses.com
  19. 19. Musician’s Unions: Benefits • The primary mission of a union is to protect musicians, performers, artists in terms of fair wages and appropriate working conditions i t ki diti • Their primary services are: collective bargaining g g employment benefits © 2006 musicbizclasses.com
  20. 20. Musician’s Unions: Benefits • Collective Bargaining uses g g the power of many members to gain workers benefits for individual workers. • Unions use Collective Bargaining with: – Record companies – Broadcasting companies – Large Live Music Venues – Symphonies © 2006 musicbizclasses.com
  21. 21. Union Contracts • Companies that sign contracts with unions become union “signatories” • They agree to honor union rules • Contracts govern: – Wages – Royalties – Working Hours & Breaks – Cartage – Travel Arrangements & Accommodations – Pension funding © 2006 musicbizclasses.com
  22. 22. Musician’s Unions: Benefits • Unions allow members “employee”-type benefits “ l ”t b fit • Including: – Health benefits – Insurance – Retirement – Other-- job referrals, mediation services, discounts , – Assistance with tax filing © 2006 musicbizclasses.com
  23. 23. Musician’s Unions: Requirements • Requirements: – One time joining fee- g generally $100-$1000 y – Annual dues- generally $100 $200 $100-$200 – Work dues- a percentage of every gig you play play- generally 1%-2% –M b Members must only work t l k union gigs © 2006 musicbizclasses.com
  24. 24. Musician’s Unions: Pros and Cons PROS- – Off Protection and benefits Offer P t ti db fit – Larger venues and Record Labels require union contracts, contracts CONS CONS- – Can be expensive for younger, unestablished artists – smaller, local venues are not union affiliated- will not pay union scale wages i l © 2006 musicbizclasses.com
  25. 25. Key Take-Aways: • Unions and Guilds are meant to protect workers from poor working conditions and abuse by employers • There are MANY organizations that provide protection for musicians performing musicians, artists, and tradespeople, etc. AFM, AFTRA, SAG, SGA, AGMA, AGVA, AEA, IATSE • Th most well-known unions f The t ll k i for performing artists in the Musical field are: • AFM • AFTRA © 2006 musicbizclasses.com
  26. 26. Key Take-Aways: • Unions are membership organizations and require members to pay joining fees, annual membership fees and dues • Musical artists should consider the Pros and Cons before joining a union • Unions can offer professional, self-employed or contract musical artists and t d ti t d tradespeople many of the l f th same benefits enjoyed by a full-time employee in a traditional setting- p y g i.e. health, retirement, insurance benefits, etc. © 2006 musicbizclasses.com
  27. 27. For Educational Use Only This slide presentation is part of the Music Business Essentials series. Contact info@musicbizclasses.com for f more information f © 2006 musicbizclasses.com

×