How and when do payouts work (payment methods, payout cadence, advances/withdrawals, business registration)?
TL;DR - Know who pays you, how often they pay, and where the money lands
Case Study - “Starlight Syntax”
Payer or source: DistroKid (DSP royalties)
Payout method and threshold: PayPal or bank via Payoneer, $0 minimum
Schedule: Monthly (about 45 days lag)
First-year reality: February streams paid mid-April
Payer or source: CD Baby Sync splits
Payout method and threshold: PayPal, $10 minimum
Schedule: Quarterly
First-year reality: Q1 YouTube CID landed mid-May
Payer or source: ASCAP (publishing)
Payout method and threshold: ACH to LLC account, $100 minimum
Schedule: Quarterly
First-year reality: performance royalties about 6 months lag
Payer or source: SoundExchange (US radio)
Payout method and threshold: direct deposit, $10 artist / $100 rights-owner
Schedule: Quarterly
First-year reality: non-interactive spins paid mid-August
Payer or source: Twitch Bits and Subs
Payout method and threshold: Hyperwallet, $50 minimum
Schedule: Monthly
First-year reality: April subs paid end of May
Payer or source: Distributor cash advance
Terms: $5,000 at 10% recoup fee
Schedule: Up-front
First-year reality: recouped in 8 months from DSP share
Lesson
Different sources land on very different timelines; one Google Sheet and a separate business bank account kept Starlight’s cash flow predictable.
Who pays you and when
Source: DSP royalties (Spotify, Apple)
Cadence: monthly
Methods: PayPal, Payoneer, ACH
Lag after usage: 45–60 days
Source: YouTube CID and Meta Music
Cadence: quarterly
Methods: PayPal or ACH via distributor
Lag after usage: 90–120 days
Source: PROs (ASCAP, BMI, PRS)
Cadence: quarterly
Methods: ACH, wire, check
Lag after usage: 4–6 months
Source: SoundExchange (US)
Cadence: quarterly
Methods: ACH, check
Lag after usage: about 4 months
Source: Neighboring-rights agencies
Cadence: semi-annual
Methods: wire, PayPal
Lag after usage: 6–18 months
Source: Merch and ticket platforms
Cadence: instant to weekly
Methods: Stripe, PayPal, bank
Lag after usage: 1–7 days
Source: Twitch or TikTok creator funds
Cadence: monthly
Methods: Hyperwallet, ACH
Lag after usage: 30–45 days
Source: Sync licensee
Cadence: up-front plus backend
Methods: wire, check
Lag: negotiated
Minimum balances and fees
Platform: DistroKid
Minimum payout: $0
Fast-cash option: “Instant Gratification” via PayPal, 1% fee
Catch: optional
Platform: TuneCore
Minimum payout: $50 ACH / $0 PayPal
Fast-cash option: Instant Withdrawal, $1.50
Catch: PayPal FX spread
Platform: CD Baby
Minimum payout: $10 PayPal
Fast-cash option: none
Catch: $1 check fee in the US
Platform: SoundExchange
Minimum payout: $10 artist / $100 rights-owner
Fast-cash option: none
Catch: wait until threshold is met
Platform: Payoneer to bank
Minimum payout: —
Fast-cash option: same-day transfer
Catch: about $1.50 per ACH
Tip
Set calendar reminders when low-balance accounts (for example, quarterly PRO royalties under $100) are about to hit threshold so cash does not sit idle.
Advances, instant cash, and recoup
Distributor advances (Stem, UnitedMasters Cash): lump sum now, recouped from future DSP royalties plus roughly 10–20% fee.
Split-pay or instant-withdraw apps (Soundrop, Amuse Pro): immediate cashout for about 2–3% fee.
Invoice factoring (BeatBread, some creator-advance products): loan against streaming history; typical interest about 6–12%.
Rule: use advances only for ROI-positive moves (tour deposit, video asset). Read the recoup waterfall — advances come out before you see new money.
Business registration and banking
Choose entity: start as sole proprietor; consider LLC when annual gross income is around $10k or more to limit liability and separate taxes.
Open a business bank account: keeps personal vs. music cash distinct; simplifies taxes and audits.
Obtain EIN or VAT ID: needed for PRO/MLC, withholding-tax treaties, invoicing.
Sales tax and merch: register a sales-tax permit if you sell T-shirts or vinyl.
Quarterly tax set-aside: park 20–30% of gross in a “tax” sub-account to avoid surprises.
Tracking and reconciliation flow
Monthly: import distributor CSV to a “DSP” sheet.
Quarterly: import PRO and SoundExchange to a “Publishing” sheet.
Color-code by arrival date: green = on time, yellow = late, red = missing; email the payee within 60 days if late.
Cash-flow graph: compare inflow vs. forecast so you know when to throttle ad spend or order merch restock.
Common pitfalls and fixes
Expecting PRO money in 60 days → remember 4–6 month lag; budget accordingly.
Forgetting foreign-tax forms → file IRS Form 6166 (US) or your local tax-residency certificate yearly.
Mixing personal and music funds → open a separate checking account; pay yourself an owner draw monthly.
Unclaimed micro-balances → set auto-withdraw or request manual payment before accounts go dormant.
Accepting an advance without reading the recoup clause → model worst-case streams; do not sign if you cannot clear the balance in 18–24 months.
Key takeaways
Different payers run on different clocks: DSPs monthly, PROs and SoundExchange quarterly, neighboring rights twice a year.
Know the thresholds and fees so small balances do not sit unretrieved.
Advances equal debt; use only when they shorten the path to ROI.
Register a business entity once revenue is steady; separate bank plus EIN simplifies taxes and audits.
Reconcile statements monthly or quarterly and query discrepancies quickly; after 90–180 days many payers close the dispute window.