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Running a label with five artists: what has to be tracked

76 · · 19 min read · Español

A label with five artists has to track what it owes. For each artist: the terms of the contract, a running balance against the advance and every recoupable cost, a statement for every accounting period on the date the contract sets, and the payment that goes with it. For the label as a whole: everyone else the records pay, the registrations that name the label as owner, and the tax forms each payment creates. The catalogue register underneath is the same one any artist keeps. What changes is the direction of the statements. They go out now.

  • A label owes each artist a royalty statement for every accounting period the contract names. Half-yearly, with three months to prepare each statement, is a common pattern; the contract’s own dates govern.
  • From each contract, copy seven terms once: the royalty rate and its base, the advance, the recoupable costs, cross-collateralisation, the accounting period, the window to object to a statement, and the term and option dates.
  • Keep a running balance per artist: each period’s opening balance, royalties, costs and payments, and a closing balance carried forward. DistroKid’s Splits can recoup a fixed amount per release, but only on money that passes through that account.
  • Producers, the owners of every song on a physical copy, sample owners and anyone else with a signed royalty are paid out of the same records. In 2026 the US rate for each song on a physical copy is 13.1 cents or 2.52 cents a minute, whichever is larger.
  • The label registers the recordings it owns with SoundExchange and, in Canada, claims the makers’ half of what Re:Sound collects. A US label reports royalties of $10 or more paid to one person in a year on Form 1099-MISC; a Canadian label reports them on a T5 slip from $50.

What does a label have to track that an artist does not?

A label owes statements and payments to its artists on the dates their contracts set, and owes everyone else the records pay. A self-releasing artist owes nobody a statement.

The money arrives in one place. A distributor pays the account holder, and on a label’s account the account holder is the label. DistroKid’s help centre says its Ultimate plans for labels run “from 5 artists to 100 artists,” and that its accounts are “designed to be accessed by one individual, with one email address and one password.” TuneCore says labels can use it, but “TuneCore does not have label-specific accounts.” Either way, five artists’ earnings land in one balance with the label’s name on it.

From there, what each artist is owed is the label’s to work out and the label’s to show. The distributor’s statement is the label’s income. The statement each artist receives is a document the label writes, on a date the contract chose. Every complaint you have ever made about a royalty statement is now addressed to you.

The catalogue underneath does not change. Every recording, release and song still needs its codes and its paper in a register kept outside the dashboard, and five artists make that register five times longer, not different. What sits on top of it is new: a ledger of what each artist is owed, and a calendar of when.

Five is roughly where memory stops being a system. One artist’s deal fits in your head. Five deals, each with its own rate, costs and dates, are a filing problem that grows every accounting period whether you file anything or not.

What do you pull out of each artist’s contract?

Copy seven terms from each contract: rate and base, advance, recoupable costs, cross-collateralisation, accounting period, objection window, and term and option dates.

Read each contract once and write those down, one row per artist, with the clause number beside each value. A contract you have to reread to answer a question is a contract you are not tracking. What each term does to the money is the subject of what a label deal takes, in percentages; here they are fields.

The rate is rarely one number. Copy every rate the contract states, by format and by source, with the definition of what each is a percentage of, because the base moves the money more than the rate does. The advance goes in as a figure and a date. The recoupable costs go in as the contract’s own list, word for word, because that list is the only authority on what may be charged against an artist’s royalties later.

Cross-collateralisation decides how many balances you keep. Curve Royalty Systems’ glossary defines it as an advance paid for one product that “can also be recouped with earnings from another product.” With the clause, one artist is one balance across every release. Without it, every release carries its own, and the earnings of one record cannot pay down the costs of another.

The accounting period and the payment date are the label’s deadlines. Write them as dates: the last day of each period, and the day the statement and the money are due after it.

The objection window is the clock that protects the label, and it runs only after the label sends something. Recording contracts usually let the artist object to a statement in writing, and Ben McLane, a music lawyer, writes in his article on royalty accounting that the period is “generally stated as being one year after the statement is sent,” with artists pushing for two or three. In Allman v. UMG Recordings, decided in the Southern District of New York in January 2008, the contract gave the artists two years, and the court noted that such “incontestability clauses” have “been repeatedly upheld as valid.”

Read that from the label’s chair. The window opens when a statement is sent. A statement you never sent never closes, and the period it should have covered stays open to argument for as long as the contract and the law allow.

Last, the term and the options. Write the date by which each option must be exercised, where the contract sets one, and the date the term ends. Those are the dates that arrive with nothing attached to remind you.

How do you keep each artist’s balance?

Keep each artist’s balance as a running account: the advance and each recoupable cost charged, each period’s royalty credited, and the closing balance carried forward.

Curve’s glossary has the two terms that hold the account together. The opening balance is “the balance on a payee’s account at the start of a period, before any royalty calculations, costs and payments have been applied”; the closing balance is “the final balance on a payee’s account after calculating all their royalties, costs and other payments.” Each period’s closing balance is the next period’s opening balance. Break that chain once and every statement after it is arithmetic on a number nobody can explain.

An unrecouped balance is not a debt. An advance is recovered out of the artist’s royalties and, if the records never earn it back, it is not repaid; the deal page has the UK inquiry’s words for it. On the label’s books it is a number that holds royalties back, not a sum the artist owes.

Every cost charged to the balance needs two things filed with it: the invoice, and the clause that makes it recoupable. A video, a tour-support payment, a mixing bill: if the contract’s list names it, it can go on the balance; if the list does not, it is the label’s own cost. An artist with an audit right can ask to see both, and a cost the label cannot document is a cost it can be asked to take back off.

Reserves are the last column, and for most small labels the emptiest. Curve’s lesson on royalty deals: “Returns don’t exist in a digital sales context, so reserves are generally only applied on physical sales.” Press vinyl and ship it to shops, and a reserve held against returns goes on the balance with the period it will be released in. Sell only streams and downloads, and the column stays empty — and the statement says so, rather than leaving the artist to wonder.

What goes on the statement you send?

A royalty statement shows earnings by release and source, the rate and base, the royalty, costs charged, reserves, opening and closing balances, and the payment.

The contract sets when. Curve’s lesson on what a label deal looks like calls “Half-Yearly with a 3 month accounting delay” a common pattern: January to June reported by the end of September, July to December by the end of March. McLane puts it at twice a year, “within sixty to ninety days after the close of each calendar six-month period.” The UK Intellectual Property Office’s 2021 report, Music Creators’ Earnings in the Digital Era, quotes an industry accountant describing a label the same way: “every six months it sends a royalty statement to the artist.” Five artists on that pattern is ten statements a year, ten payments, and ten objection clocks.

Send the detail, not just the totals. Curve’s worked example goes past the summary page to “a spreadsheet that outlines the detail of every single physical or digital sale and every single cost that the label has made upfront.” That is what an artist checks, and what an auditor asks for first. Build each line from the distributor’s lines, sorted by the period the music was used rather than the date it was posted, which is how a distributor statement is read in the first place.

Some distributors will move the money for you. DistroKid’s page for labels says “Label managers can set up an earnings split for any release, which automatically sends earnings to your artists as they are reported,” and calls that a way to keep earnings agreements “without the use of an accountant.” TuneCore offers Splits on its paid Unlimited plans, and says they “will not be applied retroactively.”

An advanced artist needs one more line. DistroKid’s recoupment setting lets a collaborator “receive all earnings for the release until a specific recoupment amount is met,” and “no earnings will be distributed to other collaborators in a Split until a collaborator’s recoupment amount is met.” It is one fixed amount, on one release. Leave it out and a split pays the artist’s percentage from the first dollar reported, while the contract says that money stays with the label until the advance is recovered. That is how a label gets screwed by a button nobody pressed.

DistroKid’s page describes the setting for a collaborator added by email, and does not say whether the account holder can be the one recouping; ask before an advance depends on it. And a split, however it is set, sees only what passes through that one account. The vinyl sold at a merch table, direct sales from your own store, a sync fee negotiated by email and the label’s own SoundExchange money never touch it, and if the contract pays the artist on them, they belong on the statement. A split can be the payment. It is not the statement.

Who else is paid out of each record?

A record pays producers, the owners of each song on physical copies and US downloads, sample owners, and anyone else a signed document names.

Each is a payee, and a payee is a row like an artist’s: a rate, a base, a starting point and a date. Producers first. How a producer’s points are counted, and from which record, is producer points in plain numbers; whether they come off the top or off the artist’s share decides whose balance they reduce. If the producer’s agreement is with the label, the producer is owed a statement too.

Then the songs, which the label does not own unless it also publishes them. Every copy of a recording owes a mechanical royalty to whoever owns each song on it. On a physical copy in the United States, the 2026 rate under 37 CFR §385.11 is “13.1 cents or 2.52 cents per minute of playing time or fraction thereof, whichever amount is larger,” per song, per copy. Five hundred copies of a ten-song album, every song under five minutes, owe the songs $655. Where the artist wrote the songs, a controlled-composition clause can lower the rate on those songs, and the deal page has the clause. The cover-song page has the rest of the rate.

Downloads and streams split the other way. On a US download the mechanical is inside the payment the distributor passes on, and TuneCore says paying it to the song’s owner is your responsibility; the statement page quotes it. On an interactive stream it is not yours at all: the service pays it to The MLC.

In Canada the licence for a pressing comes from CMRRA, which SOCAN finished buying on 1 September 2026, and which, in the announcement, continues “operating with current reproduction rights services.” Its Pay-As-You-Press licence requires “a minimum of 500 copies per contrivance.”

Samples are paid on whatever the clearance says, master side and song side, and sample clearance covers both. A featured artist with a royalty in their agreement is a payee on the same terms as a signed one. Anyone else whose paper says a record owes them something is a row in the same ledger, with the same dates. Five artists can mean twenty payees.

Which registrations belong to the label?

The label registers the recordings it owns with SoundExchange as owner, and in Canada claims the makers’ half Re:Sound collects; each artist registers separately.

The US split is in the statute. Of what SoundExchange collects under the statutory licence, 17 U.S.C. §114(g)(2) sends “50 percent of the receipts” to the copyright owner of the sound recording, 2½ per cent each to non-featured musicians and non-featured vocalists through funds administered with the performers’ unions, and “45 percent of the receipts” to the featured artists.

SoundExchange’s registration guide sorts claimants into three kinds: a performer, a sound recording copyright owner (“also referred to as ‘rights owner’”), and someone who is both. Its FAQ says the owner is “typically the label.” That registration is the label’s to make, recording by recording, and it starts with the ISRCs: submitting them, in SoundExchange’s guide to submitting recordings, makes them “available for searching and claiming by the artist for their share.”

The 45 per cent is not the label’s to register or to collect. SoundExchange pays the featured share to the performer, and the label sits on the owner’s side of that line. Tell each artist to register their own, because the label is not on the list of who can be paid it.

Register only what the label owns or holds the right to collect for. Under an assignment the label owns the recordings; under a licence the artist still does, and the contract has to say who claims what. The difference between the two deals is on the deal page.

In Canada, the Copyright Act divides the remuneration for a recording played in public or broadcast down the middle: under section 19(3), performers “receive in aggregate fifty per cent” and makers “receive in aggregate fifty per cent.” Re:Sound collects it, and its FAQ says the money is “split equally between artists and record companies,” and sends a record company to sign up with Panorama. The artist’s half, and how it is claimed, is neighbouring rights.

One more register, if the label assigns its own codes: which ISRCs carry the label’s registrant code and which carry somebody else’s. Getting codes without a distributor covers where a prefix comes from.

What tax paperwork does paying artists create?

Paying royalties requires a W-9 or W-8BEN and a 1099-MISC from $10 a year in the US, and a T5 slip from $50 in Canada.

Start before the first payment. The IRS describes Form W-9 as how a payee provides a correct taxpayer identification number “to the person who is required to file an information return with the IRS,” and Form W-8BEN as what a foreign person gives “the withholding agent or payer.” Collect one from every artist and every other payee before money moves. Royalty payments are on the IRS’s list for backup withholding, at “the current rate of 24 percent,” when a payee has not given the payer a correct number.

Then January. Royalties go in box 2 of Form 1099-MISC for anyone paid “$10 or more” in the year, and the IRS’s instructions say to furnish the payee’s copy “by January 31” and file “by February 28 (March 31, if filing electronically).” For 2026 the same instructions put rents, on the same form, at “$2,000 or more,” and left royalties at ten dollars. The federal government will still hear about the B-side.

A payee outside the United States is a different set of rules. “Most types of U.S. source income received by a foreign person are subject to U.S. tax of 30%,” the IRS’s page on withholding for nonresident aliens says, unless a treaty lowers it. Between Canada and the United States, Article XII(3)(a) of the tax convention makes copyright royalties for a musical work “taxable only” in the country where their owner lives, which is the rule the statement page cites from the receiving side. The W-8BEN is the form a foreign payee uses to claim it.

A Canadian label works from the Canada Revenue Agency’s slips. Royalties paid to a resident of Canada go in box 17 of a T5, “Royalties from Canadian sources,” and no slip is needed for one recipient whose total for the year is “less than $50.” Royalties paid to a non-resident fall under Part XIII, at “a 25% tax” unless a treaty reduces it, and each non-resident paid $50 or more in the year gets an NR4 slip, “even if you are not required to deduct any tax.”

That is the list of forms, not the advice. Whoever closes the label’s year is an accountant or a business manager, and who does what says which one that is.

What does a label’s year look like?

A label’s year is each artist’s statement dates with a payment on each, January’s tax slips, and every option, term and objection date between.

On a half-yearly contract with three months to report, the pattern Curve calls common, it runs like this:

  1. Before anything is paid. Each contract read once into its row. A W-9 or W-8BEN from every payee.
  2. Every month. The distributor’s statements downloaded and filed by artist and by period of use. Every cost charged, filed with its invoice and its clause.
  3. Whenever a release goes out. Its ISRCs submitted to SoundExchange as owner. A mechanical licence for every song on a pressing.
  4. After each period closes. Each artist’s statement built from those lines, opening balance first, and every other payee’s with it.
  5. By the end of September and the end of March. Each statement sent and each payment made, and the date it was sent written down, because the objection window starts there.
  6. January. A 1099-MISC by January 31 to each US payee paid $10 or more in royalties. In Canada, the T5 and NR4 slips.
  7. All year, on one calendar. Each option’s deadline and each term’s end, for all five.

None of that is clever. All of it rests on a register that holds every recording, release and song with its codes and its paper — the fields that matter — checked once a year against the catalogue audit checklist. With one artist that is good housekeeping. With five it is the job.

FAQ

Does each artist need their own distributor account?

No. DistroKid’s Ultimate plans hold several artists in one account, and TuneCore has no label-specific accounts at all. A DistroKid account has one login, and an artist slot, once used, is permanently locked to the account, so an artist on the label sees the label’s earnings only through the statements the label sends.

Does a label that pays no advances still need a balance for each artist?

Yes, whenever the contract makes any cost recoupable or splits profit after costs. With neither, the balance is royalties earned against royalties paid, and the statement still shows it: what was earned, what was paid, and anything carried into the next period.

Does the label collect the artist’s SoundExchange money?

No. SoundExchange pays the featured artist’s 45 per cent of US statutory-licence receipts to the artist, and the label receives only the copyright owner’s share for the recordings it registered. The artist’s share never passes through the label and never appears on the label’s statement.

Sources

Every page cited here was read on 5 October 2026. DistroKid’s and TuneCore’s help centres refuse automated reads of their pages, so each article was read through that help centre’s own article service, which returns the same text with its last-updated date; the links lead to the pages a reader can open. DistroKid’s pricing page now lists its Ultimate plan for 1 to 100 artists, where its help article for labels says 5 to 100; this page quotes the help article. Curve’s lessons and McLane’s article describe common contract terms, not yours, and your contract’s own dates and windows govern. The Allman decision is reported as Loeb & Loeb summarised it. None of this is legal or tax advice.

Keeping the register

A label’s ledger sits on a register: every recording and release with its codes, every song with its writers, every split agreed, every contract filed beside what it covers. CatalogTracker keeps that layer: releases and tracks with their UPCs, ISRCs and ISWCs; the parties with their roles; master and publishing splits per track, each confirmed by the party it names; agreements uploaded beside the releases they cover, with a warning when the splits or the parties change after signing; and a history of who changed what. It keeps no ledger, sends no statement and holds no earnings. It holds what every statement is built on. In closed beta for iPhone.