What is payroll?
Payroll is a list of a company’s employees and the amount of money they are to be paid. In the entertainment industry, most productions rely on the services of a payroll company. The payroll company is typically listed as the employer of record.
What are the responsibilities of a payroll company?
When do you need it?
A payroll company should be used any time there is a production that deals with the unions. The exception to this would be a SAG short film. Many producers try to get around using payroll due to the payroll fees and the security deposits on top of that. But as you can see, the payroll company responsibilities are a lot for a producer to take on themselves while doing the rest of their job.
Union Security Deposits
Another great thing about payroll companies is that they assist in getting the production’s security deposits back from the unions. That’s right, when budgeting your project, you must also budget for security deposits. Below are what the typical security deposits are for each union.
As you can see, those SAG security deposits can get real steep coupled with the payroll security deposit, which usually equals two week's salary for everyone on the show. There is a company I just stumbled upon that helps productions with this dilemma. Bondit provides advances against SAG, DGA, and IATSE deposits to free up cash for production or post-production financing.
How much does payroll cost?
Payroll fees vary depending on the size of your production, your budget, etc. But most reputable payroll companies will tell you that you should negotiate these fees. Traditionally, payroll fees are negotiated at $10 / check for all above-the-line payments and 1/2% fee based on the below-the-line payroll.
So as you can see, payroll is really important. Some producers find ways to do it themselves in order to avoid the payroll fees and deposits. To be honest, I don’t know how they manage all of those responsibilities coupled with producing responsibilities. I would much rather let a company take care of it, budget for the fees, and have my cast/crew happy and paid.
They’re NOT the Same
Many make the mistake of thinking these two positions are one in the same. They hire one thinking they can do the responsibilities of the other. This is wrong.
On larger productions, there are entire accounting departments that still do not include payroll. They hire a payroll company. But on smaller shows, producers think they can take on one or both of these hats.
This ends up being a major mistake. The production accountant is there to make sure producers don’t go over budget. Self-regulation isn’t something producers should rely on. Hire someone else to keep you in check.
Production Accountant Responsibilities
These are the responsibilities of the accountant:
▪ This is not the same as acting as payroll. This means they work with the payroll company.
“The payroll service depends on the Film Payroll Accountant to submit the timecards calculated to “Gross” per the various Union/Guild rules and regulations. THAT makes the Film Payroll Accountant the one who must be expert at applying the union and guild rules related to payroll.”
~ John Gaskin
These aren’t even all the responsibilities production accountants have to deal with. They are a major asset to the production and should be considered a key position on feature films.
Production Accountant Rates
Ok, so the majority if not everyone reading this is in the indie world and not the studio world. But to give some perspective, a union production accountant working on major studio productions demands about $2500 – $3500 / week. I know that seems like a pretty penny, especially for us indies. But I think it’s good to know how much a good production accountant is worth so you can make sure you are not insulting anyone by offering them $150 / day.
On a non-union low budget feature film, you’re not going to be hiring the heavily experienced union guys. However, you definitely want someone who has enough experience to not screw you and your film over. This position has a lot of power, so hire wisely. Offering anywhere from $200 – $300 / day depending on the size of your budget is reasonable.
Don’t Hand Off the Wheel
I know I mentioned earlier that you don’t want to be a producer who wears 50 hats. At the same time, you also don’t want to be an oblivious producer. It is imperative that a producer has a good understanding of EVERY JOB ON SET. You must know a little about accounting to be able to determine if your accountant is doing their job correctly or not. You also want to be involved in all email correspondence and sign off on everything. Remember, this person has a lot of control over the money. Without the money there is no shoot.
About Paulina Lagudi
After graduating Chapman University, Paulina moved to Los Angeles to pursue her filmmaking endeavors. Aware of the extremely small percentage of female filmmakers working in Hollywood, Paulina decided this was the perfect opportunity to create her own films as well as launch her production company Jax Productions, LLC, named after her first rescue dog, Jax. Since launching in June 2015, Paulina has written and produced short films, multiple commercials and online branded content. She has big plans for her company and plans to shake things up in the filmmaking community for all underrepresented individuals.
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