Common Payroll Mistakes

Thought I would share this email I received a couple of days ago. Has some great information in here about the business part of show business. Too often, like I said in a previous blog post, we forget that this fun and exhausting business is indeed a business.

3 Common Film Payroll Mistakes

If you're a newcomer to the business side of filmmaking, investing a little time upfront with a payroll professional can save you big bucks during, and after, production. At PayReel, we've worked with a lot of independent filmmakers and have seen pretty much every mistake in the book. Here's our list of the three avoidable mistakes we see most often:

Mistake #1 — Not Reading Your Union Contract
Meal penalties, forced calls, per diems, oh my! Labor unions exert jurisdiction over a wide variety of job functions and geographies in the entertainment industry. You may not even be aware of which unions will expect to be involved with your project. This lack of knowledge often results in production delays and unexpected expenses.

Mistake #2 — Inadequate Payroll Budgeting
We've seen "surprise" labor costs cause many productions to simply run out of money. This happens because the true cost of employing workers was not fully understood. "Overhead" expenses can easily add 35% - 50% to your payroll budget. And because these amounts vary by location, it's a good idea to work with someone knowledgeable about where you plan to be shooting.

Mistake #3 — Misclassifying Workers
If you don't already know what this means, we really need to talk because a state or federal audit can be a very expensive and scary thing.
What happens if you get audited and it's discovered that you've misclassified workers? We'll begin by calculating back taxes, then add penalties, and then throw in any back overtime wages. Can your production afford this?

This was sent to me by Moviemaker Magazine advertising a service called PayReel. I've heard of them before and they are worth checking out to avoid payroll mistakes. They have not contacted me for any endorsements, and I am mentioning them from word-of-mouth, so please do your own research and find the company that is right for you.

Happy Filmmaking!