Commission on Gross or Net? The Clause That Decides Your Income

Two management agreements. One says 15% of gross income. The other says 20% of net. The second sounds more expensive. On a touring artist it is usually much cheaper, and the gap is large enough to be the difference between a manager staying in the job and quitting.

The worked example

A run of shows grosses $40,000. Costs: $18,000 in travel, accommodation, crew and production. Net is $22,000.

• 15% of gross = $6,000 to the manager. The artist keeps $16,000 of the net.

• 20% of net = $4,400 to the manager. The artist keeps $17,600.

The manager on the *higher* percentage earns 27% less. Now run it on a heavier tour — $40,000 gross against $30,000 of costs — and 20% of net pays $2,000 while 15% of gross still pays $6,000. Same tour, triple the difference.

Why each side wants what it wants

Managers want gross because they don't control the artist's spending. A manager on net can do excellent work on a tour that books a bigger bus, hires an extra tech, and returns them nothing. Their income becomes hostage to decisions they didn't make.

Artists want net because gross commission can exceed their actual profit. On a break-even tour — genuinely common at developing level — the artist takes home nothing while paying commission on $40,000. That feels indefensible because it largely is.

Both positions are reasonable. The answer isn't to pick a winner.

The middle grounds that actually work

• Gross, with tour costs carved out. Commission on gross for everything except live, where it's calculated after agreed production and travel costs. This is the most common professional compromise.

• Net with a floor. Commission on net, but never less than a stated percentage of gross. Protects the manager from runaway spending without exposing the artist on a genuinely unprofitable run.

• Approved-expenses net. Commission on net, where "net" only deducts expenses the manager approved in advance. Neatly solves the manager's real objection — that they're being taxed on choices they didn't sign off.

• Different bases by income type. Gross on recorded income, publishing and sync (where there are few costs); net on live (where there are many). Reflects how the business actually works.

Define the terms, or the clause means nothing

"Net" is not self-defining, and vague definitions cause more disputes than aggressive ones. The agreement should say specifically what's deductible: travel, accommodation, per diems, crew, production, commissions to other parties, marketing. And what isn't: the artist's personal costs, gear purchases that outlive the tour, recording costs already covered elsewhere.

Also state where the manager sits in the queue. A manager paid after everyone else on a tight run is a manager paid nothing.

Make the calculation the same every night

Whatever basis you agree, the risk is that it gets computed differently by different people at different shows. Musavise's gig tracker settles each night with the money in the order the industry actually uses — commissions off the gross first, fixed costs like crew day rates next, and the remainder split — so a management commission line is calculated identically at every show and the working is visible to everyone entitled to see it.

All of it lives in one free Musavise account — free means free, within honest limits, and your data exports whenever you want it. Create your free account; it takes about two minutes.