Do Musicians Pay Taxes?
Note: This article is not tax advice, and should not be seen as that. Please refer to the tax rules in your country too get the most accurate information.
Question: Do musicians pay taxes?
Yes, if you're in a country that requires it, all musicians should pay taxes. Musicians do after all deal with an exchange in money, so taxes will need to be paid on these exchanges.
If you are under a record label, they may help and sort this out for you. If however you're an independent musician, you will need to sort paying taxes out by yourself.
In most countries, music isn't one of those things that are tax free. Because of this, you will probably need to register as self employed or as a small business to make everything legal in terms of your music career. If this is the case in your country (Get in contact with the tax governing body where you are to find out) you should definitely get set up with taxes as soon as possible.
Do You Still Pay Tax If Your Music's Not Making A Profit?
If you're not currently making a profit from your music, you won't have to pay anything in taxes. That said, regardless of whether or not you're currently earning money, if you plan on taking your music career seriously you should still get tax registered as soon as possible. The main two reasons for this being:
- You Cover Yourself From Any Potential Future Claims.
If you start making music and start making money from it, there is a chance that your country's tax governing body will find out about it some time down the line. If they do, they may ask you to provide papers for the early stage of your music career. If you can't do that, they may charge you a fine for not having the correct paper work or ‘trying to avoid paying taxes'. This will especially hurt if you actually made a loss in that time period but haven't got any way to prove it.
- You Get Used To The Process.
If you get registered for tax as a musicians, you will learn the tax process while your income is still quite low. This will allow you to learn the system while you may have more time on your hands, and while you're owing less money for taxes. Hopefully you won't make a mistake at any stage, but if you do, it's best you do it at this stage where you're not risking as much money. Then by the time you've got a profitable music career and you're making regular money, you can rest assured that you know how to use the system already.
Do Musicians Pay Tax Conclusion
Unless you're not planning to profit from your music career, you need to make sure you're tax registered as a musician. This will get you used to the process, and ensure you're operating within the law where you live.
Please look into the tax laws in your country for more information about specific rules you'll have to abide by as a musician.
P.S. Remember though, none of what you've learned will matter if you don't know how to get your music out there and earn from it. Want to learn how to do that? Then get our free ‘5 Steps To Profitable Youtube Music Career' ebook emailed directly to you!
Hi Shaun, i have to ask, does this also include taxing on money given from local gigs and performances? Or do i not have to mention those while doing taxes?
Yes it does, it’s all money you earn from your music career. Gigs, merch and the like; it all needs to be announced to the tax man (Or woman).
It’s best to keep everything above board, so to speak, from the get go. If you declare evreything and keep records of everything, if something does go awry, you have a track record behind you that should stand you in good stead. You usually are able to earn a certain amount anyway before you need to pay tax on it.
Well put Louise, right you are. 🙂
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