How much do you charge for your gig? Do you play free of charge? Play for ‘exposure’? Charge a professional performance fee? Is there even a way to determine what you should be charging?
So, here’s what goes through my mind when considering the next potential gig. “How much will the gig cost me.”
Ok, so I have to get to the gig. This means I should have a motor vehicle of some description. I need to put petrol into the tank, and occasionally I must do some maintenance. (Of course, any fool knows that by avoiding the maintenance, breakdowns become more likely. These are normally more expensive than maintenance, and they could happen on the way to a gig resulting in significant reputational damage.)
Just like maintenance, insurance is equally important. A write off of a muso’s uninsured vehicle is a huge step backwards.
So, whether or not you maintain or insure your vehicle from gig proceeds is your business, but you are taking the risk, so you should be mindful of the costs when considering your next gig, and you should be reimbursed for your costs or your risks.
The Receiver of Revenue has determined a ‘cost’ attributable to travel which can be claimed from income tax. (OK, so no one reading this is declaring their gigging income 😊…, but we can re-visit that later.) For the 2021-2022 tax year, the cost of travelling in your car has been determined to be R3.82 per kilometre. This has factored into it fuel, insurance, maintenance, capital/finance, depreciation etc. Therefore, for every gig that you do, measure the distance to the gig, and multiply it by R3.82.
As an example, let’s say you live in Gordon’s Bay and your gig is in Hout Bay. According to Google Maps, the shortest route is 70km. Multiply that distance by R3.82, and you will see that even the taxman feels that your cost of travel is R267.40, assuming fuel, maintenance, insurance, depreciation etc. Don’t forget that you must get home after the gig as well, so that’s another 70km. Total travel cost = R535. The big trap is that you may not see these costs at the time, but you are indeed using the petrol, your tyres are wearing down a little, the added km’s on the clock are bringing your car’s value down a bit more, brake pads are wearing, etc. etc. and you are running the risk of being involved in an accident.
I could go on, but the bottom line is, if you think it’s just costing you a bit of petrol, then you are living in a fool’s paradise.
Another factor to consider is the cost of your gear.
It is tough to determine what value-per-gig to attach to musical equipment, although I’m very certain that you have better gear than you can really afford. Don’t we all try and get the best we can…? Muso’s will eat less to get a better guitar, drumkit, PA etc. It’s usually worth a small fortune to the owner, and usually uninsured.
A good couple of years ago I learned how a certain gear hire business priced their equipment for hire. They used the principle that if they invest in an item, they would want to see it hired at on average once a week. Because of the expected hard life that hired gear experiences, the business wanted to recoup their purchase cost in one year. After that, the item looked well worn. The technology had moved on and clients wanted newer stuff. So, predictably, they took the cost of the gear and divided it by 52 (there are 52 weeks in a year), and that was the daily hire rate. It’s a bit of a thumb-suck method, but it seemed to work well enough in the absence of a better way.
Following this, a gigging muso should consider taking the value of the gear used on a gig and dividing it by 52. Let’s take the costs of setting up a reasonable guitar rig. An industry-standard guitar, amp, pedals, mic, mic stand and accessories can cost around R40,000. (Yes, you can get away with much cheaper, and you can spend much more. This is theoretical.) If you apply the ‘Rule of 52’ 😊, then you could reasonably say that your gear cost for a gig is R770.
Every musician is different. Each gear set-up is different. Every gig is at another venue. Apply the principles to your next gig to see if you are playing for pleasure, profit, loss, charity, or ‘exposure’.
Here’s the quick sum….
A. Distance to gig ………km x R3.82 x 2 = R………………..
B. plus Cost of Gear = R………….. /52 = R…………………
= Total measurable costs (A+B) R…………………
How much time does a gig take? Well, we can be anal about it add up…
Actual performance time.
Loading, Set-up & strike-down time.
Loading/unloading at home base.
…but even if you only consider actual performance time, how much do you think you are worth per hour? Sadly, most gigging musicians earn less than waitrons, despite the investment in gear and the time spent honing their craft.
Many muso’s use gigging as a ‘side hustle’, hopefully adding some money to their regular income and not declaring the proceeds of their gigs. If you are one of these, you probably pay normal income tax through your employer, and at the end of each tax year, there are few surprises. Maybe you get something back; Maybe you must pay in a bit, but your gigging income is untouched.
It is possible that, after considering your gigging expenses, and the possibility that you are running at a loss, you might find that declaring your gigging activities reduces your overall tax. It’s simple – tax is based on profit. If your day job earns you R180,000 per year (R15k per month), after rebates etc that’s what you get taxed on via PAYE every month. However, if you are losing R500 per month through gigging, then you have R6,000 of income reduction and the taxman will invariably owe you money. Play this game carefully and reduce your taxable income to below the ‘tax threshold’ of R83,000 approx (If you’re over 65, it’s higher), and the taxman will pay back to you all of the p.a.y.e. that your employer took off of your payslip.
(Don’t try this at home kids. 😊 – speak to a legitimate tax advisor.)
I declare the income from my side hustle because the associated costs exceed what I earn. My side hustle, running at a loss, reduces my overall tax. )
As a muso, every time you visit a venue as a patron (not a performer), it is arguable that you are visiting intending to get performance work there. The cost of travel and reasonable refreshments could be tax-claimable. Going to dinner with your band? It’s a planning and strategy session. Claim the costs of food, drink and travel. Gotta buy clothes to perform in? Claim the costs. Need internet, mobile phone, laptop to communicate with venues and or showcase your act on social media, claim the costs. By the time you are doing all of this, that 20% or more that’s coming off of your payslip could find its way back to you. That’s almost 2 months salary!
Oh, and if you get this right, give me a call and take me out for a drink to say thank you.
If you are playing purely for enjoyment, and you can easily fund the costs of being a performing musician, then ignore everything that you have read here. Alternatively, if you are performing to produce a viable income, then re-read this carefully. Adapt it to suit your circumstances, and be clear in your mind that it is the best way that you can earn a good living.
Are you having fun, or are you in the music business?