Financial Agreement Template

Money is one of the top sources of band conflict. This template helps you create clear financial agreements that prevent disputes and build trust.

Why Financial Agreements Matter

With Clear Financial Agreements:

• Everyone knows how money works
• Trust is built and maintained
• Conflicts are prevented
• Decisions are easier
• Fairness is ensured
• Band stays together

Without Clear Financial Agreements:

• Constant money disputes
• Trust erodes quickly
• Resentment builds
• Decisions are contentious
• Perceived unfairness
• Bands break up

When to Create Financial Agreements

Essential Times:

• When band forms
• Before first paid gig
• When new member joins
• When financial situation changes
• Before major investment (recording, tour, etc.)
• When conflicts arise

Financial Agreement Template

Band Financial Agreement

Band Name: _______________ Date: _______________

Members:

1. Income Distribution

Performance Income

How gig money is split:

Option A: Equal Split

• All members receive equal share regardless of role
• Split: ___% each member

Option B: Weighted Split

• Different members receive different percentages
• Member 1: ___%
• Member 2: ___%
• Member 3: ___%
• Member 4: ___%
• Reason for weighting: _______________

Option C: Role-Based

• Leader/booker gets extra: ___%
• Other members split remaining: ___%
• Reason: _______________

Our Agreement:

When payment is distributed:

• Immediately after gig
• Within ___ days of gig
• Monthly on ___ day
• Other: _______________

Payment method:

• Cash
• Venmo/PayPal/Zelle
• Check
• Other: _______________

Recording/Streaming Income

How recording income is split:

• Equal split
• Based on songwriting credits
• Based on contribution
• Other: _______________

Specific percentages:

• Member 1: ___%
• Member 2: ___%
• Member 3: ___%
• Member 4: ___%

Our Agreement:

Merchandise Income

How merch income is split:

• Equal split after costs
• Based on investment
• Into band fund
• Other: _______________

Specific arrangement:

Other Income

Licensing, sync, sponsorships, etc.:

• Equal split
• Case-by-case basis
• Based on who secured it
• Other: _______________

Our Agreement:

2. Expenses

Individual Expenses

Each member is responsible for:

• Own instrument and equipment
• Own transportation to rehearsals/shows
• Own food and drinks
• Own strings, sticks, picks, etc.
• Other: _______________

Shared Expenses

Band splits equally:

• Rehearsal space rental
• PA system and shared gear
• Recording costs
• Mixing and mastering
• Merchandise production
• Website and hosting
• Marketing and promotion
• Band photos/videos
• Other: _______________

How shared expenses are paid:

• Deducted from gig income before split
• Each member pays equal share upfront
• Paid from band fund
• Other: _______________

Expense Approval Process

Expenses under $___:

• Any member can approve
• Leader can approve
• No approval needed

Expenses $-$:

• Requires ___ members' approval
• Requires leader approval
• Requires majority vote

Expenses over $___:

• Requires all members' approval
• Requires majority vote
• Requires discussion and vote

Our Agreement:

3. Investments

Major Investments

Recording an album, buying PA, tour, etc.:

How investments are funded:

• Equal contribution from all members
• Proportional to income split
• Loan from member(s) to be repaid
• Band fund
• Other: _______________

Investment agreement:

If member leaves after investment:

• No reimbursement (investment stays with band)
• Partial reimbursement based on: _______________
• Full reimbursement if: _______________
• Case-by-case basis

Our Agreement:

Equipment Ownership

Shared equipment (PA, trailer, etc.):

• Owned by band collectively
• Owned by individual who purchased
• Owned proportionally based on investment
• Other: _______________

If band dissolves:

• Sell and split proceeds
• Member who purchased keeps it
• Split based on investment
• Other: _______________

Our Agreement:

4. Band Fund

Do we maintain a band fund?

• Yes
• No

If yes:

Purpose:

• Emergency expenses
• Future investments
• Ongoing expenses
• Other: _______________

Target amount: $_______________

How it's funded:

• ___% of each gig goes to fund
• ___% of all income goes to fund
• Member contributions of $___ per month
• Other: _______________

Who manages it:

Approval needed for withdrawals:

5. Special Situations

Missed Shows

If member misses show (with notice):

• Substitute plays, gets full share
• Substitute gets partial share: ___%
• Missing member gets nothing
• Missing member gets partial: ___%
• Other: _______________

If member misses show (no notice/emergency):

• Same as above
• Different arrangement: _______________

Our Agreement:

Partial Participation

If member plays partial set:

• Gets full share
• Gets proportional share
• Gets reduced share: ___%
• Other: _______________

Our Agreement:

Additional Work

If member does extra work (booking, social media, etc.):

• No additional compensation
• Gets extra: $___/hour or ___%
• Gets bonus from band fund
• Other: _______________

Our Agreement:

Tips

How tips are handled:

• Split equally with gig money
• Kept by person who received them
• Pooled and split equally
• Into band fund
• Other: _______________

Our Agreement:

6. Financial Management

Record Keeping

Who tracks income and expenses:

How records are kept:

• Spreadsheet
• Accounting software
• App
• Other: _______________

How often records are shared:

• After each gig
• Monthly
• Quarterly
• Upon request
• Other: _______________

Transparency

Financial transparency:

• All members have access to all financial info
• Summary shared regularly
• Available upon request
• Other: _______________

Our Agreement:

Taxes

Tax responsibility:

• Each member responsible for own taxes
• Band provides 1099s if applicable
• Band withholds taxes
• Other: _______________

Our Agreement:

7. Dispute Resolution

If Financial Disputes Arise

Process:

Final decision maker:

• Majority vote
• Band leader
• Unanimous agreement required
• Outside mediator
• Other: _______________

8. Changes to Agreement

How this agreement can be changed:

• Unanimous agreement required
• Majority vote sufficient
• Leader can modify
• Other: _______________

Review schedule:

• Annually
• When member joins/leaves
• When financial situation changes
• Other: _______________

9. Member Departure

When Member Leaves

Final payment:

• Paid for all work through departure date
• Paid after ___ days
• Forfeits unpaid earnings
• Other: _______________

Ongoing income (recordings, etc.):

• Continues to receive share
• Receives share for ___ months/years
• Buys out for $___
• Forfeits future income
• Other: _______________

Investment reimbursement:

• See Section 3 above
• Other: _______________

Our Agreement:

Signatures

By signing below, we agree to these financial terms:

Member 1: Name: _______________ Signature: _______________ Date: _______________

Member 2: Name: _______________ Signature: _______________ Date: _______________

Member 3: Name: _______________ Signature: _______________ Date: _______________

Member 4: Name: _______________ Signature: _______________ Date: _______________

Financial Agreement Best Practices

1. Discuss Before Money Arrives

Why: Easier to agree when there's no money on the table

How: Create agreement before first paid gig

2. Be Specific

Why: Vague agreements lead to disputes

How: Cover all scenarios, use specific numbers

3. Put It in Writing

Why: Memories fade, disputes arise

How: Document everything, all members sign

4. Keep It Fair

Why: Perceived unfairness destroys bands

How: Consider everyone's perspective, aim for fairness

5. Be Transparent

Why: Secrecy breeds distrust

How: Share financial information openly

6. Review Regularly

Why: Situations change

How: Review annually or when things change

7. Address Issues Quickly

Why: Financial resentment grows fast

How: Discuss concerns immediately

Common Financial Mistakes

Mistake 1: No Agreement

Problem: Disputes inevitable

Solution: Create agreement before first paid gig

Mistake 2: Verbal Only

Problem: Memories differ

Solution: Put it in writing

Mistake 3: Unequal Without Reason

Problem: Resentment builds

Solution: If unequal, have clear reason everyone agrees on

Mistake 4: No Transparency

Problem: Distrust grows

Solution: Share financial information openly

Mistake 5: Ignoring Small Amounts

Problem: Small issues become big issues

Solution: Track and split everything fairly

Sample Financial Scenarios

Scenario 1: Equal Split Band

Agreement:

• All income split equally (25% each)
• All expenses split equally
• Band fund gets 10% of each gig
• Monthly financial report

Why it works: Simple, fair, everyone equal

Scenario 2: Leader Gets Extra

Agreement:

• Leader who books gets 30%
• Other three members get 23.33% each
• Leader covers booking-related expenses
• Shared expenses split equally

Why it works: Compensates extra work, agreed upfront

Scenario 3: Investment-Based

Agreement:

• Member who owns PA gets extra 10%
• Remaining 90% split equally
• If PA is sold, owner keeps proceeds
• Other expenses split equally

Why it works: Compensates investment, clear ownership

Key Takeaways

1. Create agreement before money arrives - Easier to agree
2. Be specific - Cover all scenarios
3. Put it in writing - Document everything
4. Keep it fair - Perceived fairness matters
5. Be transparent - Share financial information
6. Review regularly - Situations change
7. Address issues quickly - Don't let resentment build

Clear financial agreements prevent conflicts and build trust. Take the time to create one that works for your band.