Understanding how mechanical calculations operate within Tone is essential for accurate accounting. While both relate to composition copyrights, mechanical deductions and mechanical royalties serve entirely separate accounting functions in Tone, operate independently of one another, and are executed in distinct workflows.

📌 Key Takeaways

• Independent Modules: Master royalty calculations and mechanical royalty calculations are entirely separate and do not interact.
• Master Side Deductions: Mechanical deductions on a master contract reduce payable master royalties and are calculated independently of participation rates or other contract terms.
• Module Requirement: Accessing the dedicated Mechanicals module requires enabling the US Mechanicals feature. Tone currently supports US mechanicals only.

⚖️ Mechanical Deductions

Mechanical Deductions (Master Royalty Calculations)

A mechanical deduction is an expense deducted from the artist during the master royalty calculation. It accounts for the mechanical royalty liability owed to publishers/songwriters for the underlying composition on physical or digital sales.

• Mechanical deductions are based strictly on unit volume, the applicable statutory rate (determined based on the sale date and track duration), and the contract's mechanical deduction rate %.
• Mechanical deductions are applied after participation rates, sales rates, and sales deduction rates have been applied.
  • Mechanical deductions are calculated independently of participation rates, sales rates, and sales deduction rates.
• Mechanical deductions are only calculated on tracks that have “report mechanicals” enabled.

Calculation Logic

$$ \text{Deduction Amount} = \text{Units Sold} \times \text{Applicable Statutory Rate} \times \text{Mechanical Deduction Rate \%} $$

Example 1

1 digital download is reported with a sale date of 1/1/2026, making the applicable statutory rate $0.131. If 1 contract has a 20% mechanical deduction rate, the deduction is calculated as follows:

$$ (1 \text{ unit} \times \$0.131) \times 20\% = \$0.0262 \text{ deducted} $$

Example 2

1 digital download is reported with a sale date of 1/1/2026, making the applicable statutory rate $0.131. If the same track is linked to 2 contracts, each with a 100% mechanical deduction rate, the deduction is calculated as follows: