The Difference Between a Buyout and Per Diem

Understanding the difference between a per diem and a buyout may seem elementary to those who have been touring for a while, but for those who are very new to touring, it can be quite confusing. Imagine the scene, someone approaching you with a wad of cash. “Ok, here is your buyout for today, along with your per diem for this week. Sign here. Thanks.” You are left with a pile of money, and you don’t really know why you are receiving it, or what it is for.

What is a buyout?

A buyout is the amount of money you receive in lieu of receiving a meal. This money is coming from the hospitality budget of the show. Generally speaking, this money is meant to cover the dinner meal, but it can be used for whatever you want. The amount of the buyout will vary show to show, especially depending on how the show is selling.

In this scenario, you will have to source your own food. When the club is in an area with lots of restaurants, this can be a great way to take a break from the venue and get out and see what the city has to offer. For those who cannot leave their work stations, the tour manager will coordinate a food order that will be delivered to the venue.

What is a per diem?

A per diem is an agreed upon amount of money you receive from the tour. This is a daily, agreed upon rate that is typically paid out weekly (IE: 7 days at a time), in cash, by the tour manager or tour accountant. For example, if you agreed to a $35 per day per diem, you would receive a weekly cash payment of $245. This is typically given out on the same day every week, and you will be required to sign a receipt of some sort. This amount is not taxable. Per diems are received regardless of what the hospitality situation is for any given day.

If you’ve toured for any amount of time, you will definitely have the moment of, “Did I receive my PD this week?” Thus why signing the receipt is very important for both you and the tour accountant. In some instances, it is possible to arrange for a direct deposit of your PD’s, but most people like to have some walking around money in their pockets.

In practice

So, for example, let’s say you have a show where breakfast, lunch, and dinner are provided in the form of catering. In this situation, you would NOT receive a buyout, but you would still receive your per diem. To make it super simple and avoid any confusion, if you receive a hot meal, you will not receive a buyout. If you have any outstanding questions, please don’t hesitate to contact me.

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