Free tool

Record deal calculator

This free record deal calculator shows what a label deal actually pays you: enter your streams, your royalty rate and your advance, and see how many months it takes before you get a penny. It’s the label setting of our Spotify royalty calculator, preset to a typical deal.

How many streams a month?

Who releases the recording?

Label services deals vary. Use the share in your contract.

New major-label deals averaged a 23.3% royalty in the UK in 2021. Producer royalties usually come out of it too.

Your share of the recording is less than 100% if you split it with bandmates, a producer or anyone else.

Who wrote the song?

Your share of the song comes from your split sheet with any co-writers.

The three numbers that matter

The advance. Money the label pays you up front. It isn’t a gift: it’s paid back out of your royalties.

The royalty rate. Your percentage of what the label earns from your recordings. The UK competition regulator, the CMA, found new major-label deals averaged 23.3% in 2021, up from 19.7% in 2012. We’ve set the calculator to that.

Recoupment. The label keeps your royalties until the advance, and usually recording costs too, are paid back. Until then you get nothing from the recording.

At 500,000 Spotify streams a month and a 23.3% royalty, you’re credited about $350 a month. Set that against a $50,000 advance and the calculator shows how long you wait.

Why the headline rate isn’t what you get

The CMA worked through an example: a 25% royalty came out at an effective 19% over ten years, once a producer’s royalty and recoupable costs came off. Read the deductions, not just the percentage.

Steve Albini made the same point in 1993 with an illustration, not a real band: a $250,000 advance, 250,000 albums sold, and each member left with $4,031.25.

It still happens. Kreayshawn, whose “Gucci Gucci” went viral in 2011, said in 2020 that she gets $0 from it and is $800k in debt to Sony. Until a deal recoups, the hit pays the label back, not you.

What else to check

Some deals take a cut of gigs, merch and publishing too: that’s a 360 deal. For the full picture of advances, ownership and term, see how record deals work. And before you sign, talk to a music lawyer. More in our music royalties and pay guides.

Common questions

How is a record deal royalty calculated?

Your royalty rate times what the label receives from your recordings, minus anything the contract says comes off first.

How long does it take to recoup an advance?

It depends on the advance, your rate and your streams. Enter your numbers above and the calculator gives the months.

Is an advance a loan?

Not quite. You usually don’t repay it from your own pocket if the record flops, but you see no royalties until it’s recouped.

Is releasing yourself better?

You keep far more per stream but get no money up front. Compare costs with the music distribution calculator.

Where these figures come from