Invoices, payroll services, KVR/RPI’s, etc. Getting your money after a gig can be quite the hussle. One thing is clear: the good old days of cash payments are long gone. Here are the pros and cons of every legal payment method for DJs out there.
In not so distant times, everything money-related in the nightlife industry was settled in cash. It would be a common practice for the club's promoter to prepare labelled envelopes with certain sums of money for each DJ beforehand. But in a quest to fight 'dirty money' and make taxation more efficient, the state has cranked up the pressure for bar and club owners to manage their books clean to a higher level. This meant that payments made to their staff and DJs needed to become on the record and traceable, which implied bank transfers and contracts. Everyone we have spoken to for this interview strongly discouraged getting your DJ fees in cash – and with good reason. As the recipient, you make yourself vulnerable for possible foul play, and you enjoy no protection what so ever.
Good thing there are other, more secure, more legal ways to get yourself paid. Let's start with the KVR's (in Flanders) or RPI's (in Wallonia). This method is preserved for the reimbursement of 'artistic performances' and is not subject to taxation or social contributions. After venues stopped paying in cash, this system seemed destined to become the way DJs would get their money in years to come. To be able to get paid via KVR/RPI, one needs to have a permission to perform as an artist (freely translated: an 'artist card'), a sort of identification that certifies your status as an artist. With this card, artists can write out KVR' s/RPI's exclusively for what's considered to be artistic activities (under some conditions of course). Now, here comes the problem many young DJs will be familiar with: the Artist's Commission, the statutory body that decides over these matters, does not officially recognize DJ-ing as an artistic activity. Therefore, DJs are not eligible for such a card and cannot (at least officially) make use of KVR' s/RPI's.
"This classification as an artist was not intended for DJs, but artists in different fields", explains Lieselotte Deforce from AMPLO, a payroll service that caters to artists. "If you are classified as an artist, you enjoy certain benefits that are designed especially for the needs of performing artists: a performer who's working on a show for six months without income for example. This statute then could reimburse a part of his or her income during that time. A DJ doesn't deal with these kinds of situations, so they're left out". In a way, it all boils down to what can be understood as 'an artistic performance'. Surely DJs and their fans think a DJ-set should be counted as just that, but that's not the case as of now. As long as DJs are not recognized as artists by the Artist's Commission, using a KVR/RPI for your payments is technically illegal. Jan Pauly, co-operator at Poppunt, an advisory body for young artists, clarifies what this committee understands as art (and what not) with a few examples. "For them, a director delivers an artistic performance, but a cameraman doesn't. An illustrator delivers an artistic performance, but a graphic designer doesn't. And so, a guitarist delivers an artistic performance, but a DJ doesn't". Quite clearly, these are very narrow views on the definition of art, but alas, they dictate the available payment possibilities for DJs across the country.
For the Artists Commission, a guitarist delivers an artistic performance, but a DJ doesn't.
When we requested more information on why DJs are not eligible for official identification as an artist by the Artist's Commission, chairman Fernand De Vliegher answered that "applications for DJs are reviewed case by case" and that "a lot of applications are denied because they don't contain sufficient information to make a case". This may be true. Still, it doesn't explain the official stance the commission has on DJs in general.
Payroll services and temporary employment agencies.
So why not work with a payroll service or employment agency? After all, these work pretty simple and straightforward: you tell them who's employing you (and for what amount) and they make sure you get paid. Well, as many first-timers may recall, there seems to be a big downside with this method. Roughly 50% of your fee gets deducted from your received amount. That certainly seems like a disproportionate amount for young DJs who take their first steps in the nightlife industry, but there's good reason for this. "This way, you essentially sign a contract of employment, with all the benefits that come with it", explains Deforce. You're signing a temporary work contract with the payroll agency. Your DJ fee has become a de facto gross salary, while the net wage is deposited on your bank account. "When you sign a contract with such a service, you essentially become their employee", adds Pauly. "That detail may seem unimportant, but this statute is worth a lot in our country. The amount of your fee that you don't see on your bank account takes care of your insurance (which includes your transport to and from a gig), your social contributions (which means you become eligible for a pension or unemployment allowance) and a guaranteed pay in case of sickness, etc.". In the end, the payroll service itself takes a small percentage to cover the costs of running the office.
With a payroll service you'll never have issues with unpaid invoices, because we pay you first and then we manage everything else with the promoter afterwards.
With this method, all in all, you are paying around the same as anybody else for their labour. People with a work contract have those costs covered by their employer. Self-employed freelancers are usually taught this lesson when they start making their first invoices: keep half of what you charge and save the rest for the (hidden) fixed costs that come later. "After a long while of 'little envelopes', I chose to work with a payroll service", says Timmerman, a DJ from Hasselt who has only been in the spotlights for about two years. "They pay me first, and then they send an invoice to my booking agency". This step makes a notable difference. "You always get paid with a payroll service", says Deforce. "You'll never have issues with unpaid invoices because we pay you first and then we manage everything else with the promoter or booker afterwards".
Still not an ideal situation.
As long as they are not allowed to work with KVR/RPI's, young and starting DJs are pushed into illicit work.
The thing is, there's not a simple solution when we're dealing with low artist fees. These form an issue for payroll services because they are obliged to work according to the national pay grade. So if the price doesn't go up, these amounts become a problem for any DJ who's trying to get paid legally. "As long as they are not allowed to work with KVR/RPI's, young and starting DJs are pushed into illicit work", adds Pauly.
Paying your DJs more is a good way to start overcoming this problem (and so we argued in our previous article that DJs should never play for ridiculously low fees). But if you're familiar with the reality of a promoter, you know that in today's age, it's economically unfeasible to pay every DJ what he deserves. Without going too much into detail, after the costs of a headliner, the rent, the promotion and the personnel has been made, little remains for the warm-up DJ; however good the intentions of the promoter may be. In what's a notoriously volatile business, promoters are just not inclined to start paying double for a kid who they've never heard of.
Self-employment isn't always the solution.
So when beginning DJs are stuck between a rock and a hard place, one other method to get paid often seems like an easy solution: becoming a (full-time or part-time) independent self-employed artist. A fair amount of DJs who have in the game for a longer time (and thus can count on a greater consistency of DJ income) make use of this statute. "I was frustrated by the fact that the only legal way to get paid for my DJ-sets was via a temporary employment agency", says Bibi Seck, a young DJ from Antwerp. "And thus I became a part-time freelancer to deal with these on my own".
Basically, a self-employed DJ has his or her VAT number and can, therefore, send invoices to the promoters that use their services. So far, so good you'd say, at least you get to keep most of your artist fee, right? Well, not really, at least not in the long run. "Young DJs often think becoming self-employed is the solution, without considering (or hugely underestimating) the inevitable costs that come later", explains Deforce. "Every fee you receive is essentially your gross income; thus you will need to pay for your social contributions and taxes, which essentially will cost you a similar percentage of your fee you would normally lose when you work with a payroll service".
Self-employed freelancers are just that:
self-employed. So that means you're also paying for the costs you wouldn't
usually bother with if you're employed by someone else. It might look like they
are making a lot of money based on the amount they invoice every for every gig
– but the hidden costs can be quite the hurdle if you haven't planned for them.
'Regular' freelancers (aka people who are not in the music business) usually
have a steadier flow of invoices they can rely on. Still, DJs often have to
deal with 'slow months', especially after the summer. When the time to pay your
taxes coincides with such a dry spell, it can be a harsh realization if you haven't prepared for it. This
freelance approach to DJ-ing thus only becomes interesting if you have a
reasonably consistent flow of gigs.
People often see a popular DJ take big fees for a one hour set, but most DJs never get to charge that at all.
So what's a young and beginning DJ to do? "The most commonly-made mistake is to ignore your finances", says Pauly. "I have to admit, it's not the sexiest subject, but you won't get there with just your DJ-skills. You need to inform yourself about your options, learn what the difference is between an employee and a self-employed freelancer, decide what's the best way to organize your business. It all shapes your professionalism as a DJ".
There is no one-size-fits-all solution.
"It's an illusion to think all DJs earn heaps of money. "Don't see DJ-ing as a means to get rich quickly", adds veteran DJ TLP. "People often see a popular DJ take big fees for a one hour set, but most DJs never get to charge that at all. On top of that, there's a lot of hidden costs, preparation time and irregular hours, so you need to decide for yourself if you're willing to deal with that before you make that decision"."There's no one-size-fits-all solution", adds Deforce. "There are only different solutions depending on your situation. Just stay informed and don't be afraid to ask for advice". "Stay informed", continues Pauly. "Don't hesitate to ask other DJs about how they manage their money. Ask for advice from institutions like Poppunt, Cultuurloket, a payroll service, etc. Just don't blindly agree to take 75 euros in cash from a promoter without anything written on paper". Bottom line: there are no quick fixes for beginning DJs. "There needs to be a solution for artists who are in a position in which they are bound to take low fees", concludes Pauly. "We need to strive for a world in which everyone can get paid according to the lawful pay grades, but we all know we're not there yet. Maybe a revision of the KVR/RPI model that includes DJs could be a way out. But in the meantime, DJs need to avoid undocumented payments".