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Let's examine the benefits of utilizing an entertainment payroll service company vs processing payroll in house.

Updated on October 30, 2014
The nightmare of processing payroll yourself!
The nightmare of processing payroll yourself!

What we are tempted to do:

In the entertainment business we are all tempted to handle tasks in-house. The reason we choose to handle tasks from production budgeting, payroll and accounting, to cameraman, gaffer or electrician is usually for these three reasons:

  • You can handle it
  • It will be cheaper
  • It won’t take any time at all

It's possible you can do ALL of these tasks yourself, though really, why should you?

Let's go over the reasons for outsourcing your production payroll.

A crew on a film shoot
A crew on a film shoot

So, you decided to try to run payroll in-house ... dreadful isn't it?

When you realize how monumental the task of processing your own payroll for your talent and/or crew on your film, media or theatre production is, you will have wished you had outsourced it.

Why?

You realized how dreadful it really was because it cost you more, took forever to complete and the outcome was not as great as you would have expected it to be.

The reasons were obvious, but you discounted those reasons and put them aside knowing before you started the project that you didn't really have the expertise, or the time to complete it.


Film Reel
Film Reel

Let’s go through a list of items you should consider if you choose to payroll in-house ...

Here is a list of items for your consideration … these are the requirements for you if you choose to handle payroll yourself, or even with the assistance of a bookkeeper …

  • All employees are filed under your FEIN number therefore you are responsible for the tax liabilities.
  • You will need to accurately assess each timecard and calculate your talent and crew hours and overtime meal breaks, premium pay and penalties – and don’t forget the agents
  • You will be responsible for payment of all taxes (employer and employee tax fees, including all Federal, state and local taxes) to the applicable agencies.
  • You will handle all the liability of filing accurate returns to the IRS and local and state governments.
  • You will handle all tax deposits and quarterly taxes.
  • You will handle the processing of all year-end W-2s and 1099s.
  • You will handle the processing of the W-3 (employer form)
  • If there are any discrepancies in the amount of taxes paid, you will have to handle the issue.
  • You are responsible for any errors in tax filings and the payment of any tax penalties.
  • Unemployment filings are handled you.
  • Direct Deposit procedures are handled by you.
  • Verification of SS numbers is handled by you; and if there is an issue, you will be responsible.
  • If there are any garnishments (tax levies, child support, etc) that are required by law to be taken out of an employee's check, you will take care of those requests.
  • If there are any issues regarding fraudulent check cashing, you will handle the issue.
  • Worker's compensation insurance is applied for, paid for (even the extra premiums) and all of the audits are also handled by you.
  • Worker's Compensation claims are processed through you, and handled by you.
  • Unemployment insurance will need to be obtained for each state you are shooting in. All claims are filed against your state number.
  • If any unions are involved (SAG-AFTRA, IATSE, Teamsters, Actors Equity, DGA, PGA, WGA etc), you will process the related pension and health benefits on behalf of your talent/crew.
  • If any Union "back payments" is required for an employee, you will be responsible for the processing of the request from the union.
  • You will be responsible for the submission and payment of all union related documents including final cast lists, residuals calculations, health, pension, welfare and dues payments, holiday and vacation payments and more.

A theatrical production
A theatrical production

Here are the benefits of utilizing an entertainment payroll company …

  • All employees are filed under the payroll service company’s FEIN number therefore you are not responsible for the tax liabilities.
  • Your payroll company will be responsible for accurately assessing each timecard and they will calculate your talent and crew hours and overtime meal breaks, premium pay and penalties, and the agent’s percentage.
  • Your payroll company will be responsible for payment of any taxes (employer and employee tax fees, including all Federal, state and local taxes) to the applicable agencies.
  • Your payroll company will handle all the liability of filing accurate returns to the IRS and local and state governments.
  • Your payroll company will handle tax deposits and quarterly taxes.
  • Your payroll company will handle the processing of all year-end W-2s and 1099s.
  • Your payroll company will handle the processing of the W-3 (employer form)
  • If there are any discrepancies in the amount of taxes paid, your payroll company will be will handle the issue.
  • Your payroll company will be responsible for any errors in tax filings and the payment of any tax penalties.
  • Unemployment filings are handled by your payroll company.
  • Direct Deposit procedures are handled by your payroll company.
  • Verification of SS numbers is handled by your payroll company; and if there is an issue, you will not be responsible.
  • If there are any garnishments (tax levies, child support, etc) that are required by law to be taken out of an employee's check, your payroll company handle these requests.
  • If there are any issues regarding fraudulent check cashing, your payroll company will handle issue.
  • Worker's compensation insurance is applied for, paid for (even the extra premiums) and all of the audits are also handled by your payroll company.
  • Worker's Compensation claims are processed through your payroll company, and handled by your payroll company.
  • Unemployment insurance will need to be obtained for each state you are shooting in. Your payroll company will handle wetting up these accounts and all claims are filed against your payroll company’s state number.
  • If any Unions are involved (SAG-AFTRA, IATSE, Teamsters, Actors Equity, DGA, PGA, WGA etc), your payroll company will process the related pension and health benefits on behalf of your talent/crew.
  • If union "back payments" are required for an employee, your payroll company will be responsible for the processing of the request from the union.
  • Your payroll company will be responsible for the submission and payment of all union related documents including final cast lists, residuals calculations, health, pension, welfare and dues payments, holiday and vacation payments and more.

Bottom Line ...

Even though you will incur a higher cost by choosing an entertainment payroll company, as shown above, the benefits outweigh the costs.


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