Salary / compensation, cost dispensation (KVR) and payment
The artist arrangement mentions the term performance fee, not salary. The Dutch Tax Office makes a distinction between performance fee and salary.
Different arrangements can be made about the performance fee. We distinguish the following variations:
- Performance fee: total salary excluding 9% VAT, i.e. the all-in amount agreed with the client. This may exclude administration costs, depending on the agreements made. For VAT-registered clients, 9% VAT is charged on top of the performance fee.
- Gross salary: salary including salary tax but excluding social premiums. These premiums are charged on top of the gross salary, so the client pays these premiums.
- Net salary: salary that the performing artist receives on his / her bank account. Salary tax and social premiums have already been deducted and are paid by the client.
A performance fee excluding VAT is the most commonly used method of payment.
Artists who are payrolled via the artist arrangement will be entitled to a cost deduction from payroll tax for their professional expenses. Cost dispensation (KVR) is a pre-deduction of professional expenses. No salary tax and social premiums are deducted from the amount of applied KVR. The KVR amounts to a maximum of € 163 per performance. The amount of the KVR does not have to be equal to the professional expenses for the specific performance. In the income tax return, the total amount of applied KVR for one calendar year should equal the total of annual professional expenses. In case less professional expenses can be deducted than the total amount of applied KVR, income tax still has be paid.
- The performing artist doesn’t have to wait for income tax return at the beginning of the year, if sufficient professional expenses can be deducted.
- No social premiums are deducted from the amount of applied KVR. This is an advantage if the performing artist does not claim unemployment or sickness benefit in the future. This is also beneficial if the performing artist is permanently employed (with a fixed contract), so no double social premiums have to be paid.
- The performing artist cannot claim unemployment or sickness benefits because no (or a part of) social premiums were paid. It could also result in a lower social benefit.
- If less professional expenses can be deducted than the amount of applied KVR, income tax must still be paid later on.
In order to apply the KVR, we need a signed permission form from the performing artist. On our website you can find a KVR permission form. Our application form also has a section in which artists can give permission to apply KVR.
In addition to the performance fee, there may also be reimbursements to the performing artist/professional. A few examples:
- Meal allowance (sejour): untaxed fee of up to € 25 per performance date, intended to buy meals on location. No receipts need to be submitted.
- Travel expenses: expenses by car or by public transport (train, tram, metro, bus, taxi or airplane). Car expenses may be calculated with € 0.19 per kilometre via the KVR. All other travel expenses can be fully reimbursed if the original tickets are submitted by post. Car hire can also be reimbursed via travel expenses.
- Accommodation fee: hotel and B&B expenses paid by the client, when the performing artist performs at a distance from home and stays overnight. These costs will be fully reimbursed if we receive the original invoice of the hotel, B&B etc.
Once we received and processed a complete payroll assignment, the client receives an invoice from us. Once this invoice is paid, usually within 21 days, we will transfer the net salary to the artist’s bank account the same day. A group of artists can also be paid on a shared bank account.
Note: If personal data is incomplete, we will hold the payment until we received all missing data or documents. The artist will receive a status notification about this by e-mail.