News & InfoEP StoreAcademySupportCommunityProducts by Country
Blog Home

Budgeting for 2022: A Production Accountant's Guide

EP's Payroll Tax, Production Incentives, and Business Development experts explain how inflation, unemployment, worker’s comp, and other economic trends will impact your 2022 production budget.
December 15, 2021
2022 Budgeting

It’s unavoidable - production costs will increase in 2022. To help you prepare, EP’s team of payroll tax, production incentive, and business development experts explain why. Gain insight on how economic trends will impact your finances next year, learn about incentive program changes, and let our experts guide you as you work to build an accurate 2022 production budget.

Watch the Budgeting for 2022 - What Productions Need to Know webinar, on demand now.

First, let’s touch base on what tax changes you can expect to see next year.

State Tax and Workers Compensation Changes

Payroll tax expert Becky Harshberger explains that federal borrowing and depleted state trust funds will lead to higher unemployment tax rates for many states in 2022. Oregon and North Carolina won't adjust rates because both have healthy trust funds. However, most other states are likely to do one of two things. They’ll either raise state unemployment insurance tax rates, known as SUTA or SUI, or they’ll issue a special tax assessment.

Each state sets its own SUTA rate, announced publicly via a tax notice. A special tax assessment is a flat fee increase that lasts until the state builds its trust fund back up. To give you an idea of what that can look like - New York issued a $12.75 per-employee fee after the great recession that tapered off over three years.

According to business development expert, Steve Wegner, state workman's comp rates will also increase moderately next year.

As states continue to issue notices in the coming weeks, we'll have more details on what rates will be and how these increases will impact your 2022 payroll.

Federal Tax Changes

A handful of states with depleted trust funds defaulted on federal advance loans they used to pay unemployment claims during the pandemic. These states elected not to use COVID relief program funds issued by the American Rescue Plan Act (ARPA) to repay their loans. When states default on federal unemployment loans, federal unemployment tax (FUTA) rates go up.

Based on how states are faring right now, Harshberger confidently predicts that California, Colorado, Connecticut, Illinois, Minnesota, New Jersey, New York, Pennsylvania, and the Virgin Islands will increase federal unemployment tax in 2022. Rates will increase by $21 per employee in these states, meaning employers' costs will rise from $42 to $63. The Virgin Islands are still paying off borrowing from the great recession, so their federal unemployment will increase to $252 per employee.

Additionally, the federal social security wage base is rising from $142,800 to $147,000, and employer match will increase from $8,854.60 to $9,114.

Now, let’s discuss how general economic trends are affecting productions.

The Impact of Inflation

The annual US inflation rate hit 6.8% in November of 2021 - the highest we've seen since June 1982. As a result, food, gas, and lodging have all become more expensive, and material costs skyrocketed in large part due to serious supply chain issues. Unfortunately, we expect this rate to continue to climb, albeit slowly, as we head into the new year. 

With that in mind, make sure your 2022 production budget allows you to absorb higher costs across the board. You can achieve this by including a percentage-based inflation buffer for line items subject to heavy fluctuation - like food. For example, Wegner suggests budgeting $1.50 to $2.00 more per plate to account for added costs you’ll face to feed your cast and crew.

The Ongoing Cost of Covid

Over the last two years, most productions spent 10-15% of their budget on COVID safety protocols - and a handful spent as much as 25%. The California Film Commission (CFC) reports that most of the state’s productions spent about 5% of their total film budget on COVID safety.

Labor costs account for 40% of all COVID compliance expenses - including salaries for safety officers, testers, drivers, location assistants, and medical personnel. The other 60% goes towards goods and materials, including outside testing vendors, plexiglass, sanitizing materials, face masks or shields, and quarantine stipends. Harshberger notes that all stipends are taxable and must be reported on W2s, so be sure to keep that in mind.

Considering inflation and the fact that the pandemic is wildly unpredictable, we suggest playing it safe by earmarking 10-15% of your total production budget for COVID compliance expenses. In the panel discussion, Wegner notes that taking a few extra seconds to add a specific tag to COVID-related line items in your budgeting software can be a smart move. Then, you can use the tag to easily run detailed cost reports.

Now that we have covered what’s changing when it comes to expenses, let’s talk incentives.

2021 Incentive Program Updates

Here are a few key incentive program changes that happened in 2021.

  • Attractive Location Opportunities
    Production incentive expert, Joseph Chianese, encourages production teams to add North Carolina to their shortlist of potential 2022 filming locations. He says, “North Carolina reduced minimum spend requirements for tv and movie projects and increased their spend caps. [Their program] gives you residence and non-residence above and below the line, and they have close to $30 million in available funding.”

    Chianese also mentions Kentucky as an attractive option. The state has $75 million in funding available, has a $250,000 minimum spend threshold, and is offering a refundable 30-35% tax credit effective January 1, 2022. Nebraska also has a new 20% grant.

    Internationally, Bulgaria is offering a 25% incentive, and Cypress increased their incentive from 35% to 40%.
  • Three States Face Loan Out Changes
    Georgia is discussing how loan outs will be handled in 2022 and has indicated that ‘hold days’ will not qualify for the incentive. Additionally, indirect taxes are impacting actor loan outs in New Mexico and Hawaii. If you plan to film in any of these locations, contact EP for details on how these adjustments affect your budget.
  • California Tax Incentive Update
    California’s Basics 3.0 tax incentive program hasn’t undergone any major changes, but it did get some major funding. In July 2021, a legislative bill added $180 million to the program - $90 million for the 2021-2022 fiscal year and $90 million for the following year. This bill also allocated $150 million to be used for renovating existing and building new California stages. In total, California currently has $660 million in available funding. 

Production teams wanting to take advantage of this program need to be aware of the calendar. There are several application deadlines throughout the year, and each one is specific to a certain type of project (independent film, feature film, TV, etc.). If you miss an application window, you have to wait until the next one to be considered for funding. You can see a list of deadlines on the California Film Commission website.

Legislative sessions are starting soon, which may lead to more incentive program changes coming down the pike. Sign up for the EP incentives newsletter to stay up to date, and use the EP incentive website as your trusted resource for domestic and international program details.

Preparing for a Profitable 2022

2022 promises to bring higher federal and state unemployment tax rates, ongoing COVID safety protocol costs, and persistently rising inflation. With that in mind, production accounts should be prepared to spend 10-15% more on 2022 productions. 

Plan your budget accordingly, and keep an eye on the EP blog and incentives website for updates. We'll also be releasing our 2022 paymaster guide early next year, so stay tuned! In the meantime, contact EP if you have questions on rates, incentive programs, budget guidance, or payroll tax.

Related Content

Digging Out of a Deficit-featured

Digging Out of a Deficit: What to Expect in the Second Quarter of 2022

2/25/2022
Federal and State Unemployment Insurance rates are rising. Learn how these changes will affect 2022 and...
Watch
International Financing-John Hadity-ft

The Beginner’s Guide to International Film Financing

2/15/2022
What to know before you begin an international financing plan
dollar signs representing digital crowdfunding

The Beginner’s Guide to Crowdfunding

7/26/2022
How filmmakers can leverage the power of social networks and online platforms to build buzz and secure...
KJ Lamb and Simon Donovan

Empowering the Next Wave of Production Accountants

5/2/2022
The EP Production Portal team was delighted to participate in the biannual Netflix Assistant Production...
EP Newsroom-Thumbnail-Portland Business Journal

How Oregon’s updated film incentive law could boost the local economy

3/29/2022
A new Oregon film and media incentive law could draw more movie productions to the state.
International Film Financing panel-featured

Film Financing Explained: International Financing

3/10/2022
International production experts discuss how producers can utilize financing systems outside of the US,...
EP Blog_SQUARE_Island Incentives

A Ticket to Paradise

1/26/2022
Island Incentives Bring Productions Ashore
Western Canada

Production Tax Incentives in Western Canada Every Producer Should Know About

10/4/2022
Alberta and Manitoba offer film and TV productions competitive tax incentive programs and versatile...

Film Industry Booms in Buffalo

9/20/2022
Western New York draws top filmmakers with expanded tax incentives, new soundstages, and architectural...
EP Blog_SQUARE_New York

NY Convenience Rule Impacts Remote Production Workers and Film Incentives

9/13/2022
How remote employee payroll taxes apply to New York-based productions and if an employee’s physical...
Master Series Square Thumbnail-Film Financing-Crowdfunding

Film Financing Explained: Crowdfunding

9/8/2022
Emily Best (Seed&Spark), Stacy Bradford (Indiegogo), and producer Zach Fineblum join us to discuss the ins...
EP Blog_SQUARE_US Expanded Incentives 2022-2

A Record Number of US States Expand Filmmaking Incentives in 2022

8/25/2022
Your guide to the latest news in production incentives and film programs to come from the 2022 legislative...
EP Blog_SQUARE_New US Incentives 2022

New US Film Incentives Introduced in Arizona, Indiana, Florida, and West Virginia

8/23/2022
As production continues to boom, new tax credits and other programs welcome industry to new locations...
Los Angeles Times logo-sq

Hollywood production in U.K. soars to record levels as crews complain of burnout

8/22/2022
Spending on film and high-end television shoots reach record-breaking amounts as production activity...
EP Webinar Panelists - US Production Incentives Update

US Production Incentives Update: New and Expanded Programs in 2022

8/19/2022
Film commissioners Colleen Bell and Sandy Lighterman, and production executives Jay Roewe and Ashley Rice,...
EP Blog_SQUARE-Atlantic Canada Expands Incentives

Atlantic Canada Expands Film Incentives in 2022

8/16/2022
Enhanced production incentive programs attract industry to Newfoundland & Labrador, Nova Scotia, and...
Streaming platform on tablet device

The Evolution of Residuals: How Streaming Changed the Model

8/11/2022
Understanding how residuals payments are calculated for new content on streaming platforms.
Mount Hood, Oregon

Building on Oregon’s Cinema Legacy

7/19/2022
How improved tax Incentives, job training, and production infrastructure is expanding the filmmaking...
5 Master Series panelists discussing Atlantic Canada production incentives-square

Production Incentives Update: Atlantic Canada

7/15/2022
Learn how productions can benefit from newly expanded incentives in Nova Scotia, Newfoundland & Labrador,...
EP Blog_SQUARE_filmmaking in new mexico

Forging the Future of Filmmaking in New Mexico

6/29/2022
As the film industry expands in the Southwest, New Mexico leads the region as top destination thanks to...
EP Blog_SQUARE-Pitching Reality Tv-2

Pitching and Financing Unscripted Television

6/7/2022
Ready to sell your big idea for a reality TV program? This guide will help prepare you for the road ahead.
Jennifer Liscio

Spotlight: Jennifer Liscio, VP of Tax Incentives and Legal Affairs

5/31/2022
Meet EP's Canadian legal affairs and tax incentives domain expert, Jennifer Liscio, and learn how she’s...
EP Blog_SQUARE-Historical content and new media

Residuals and the Streaming Model

5/24/2022
How residuals apply to historical content on new media platforms.
EP Blog_SQUARE_World Revenues_global currencies

The Beginner's Guide to World Revenues, Foreign Sales, and Senior Debt

5/17/2022
Learn how shopping your project around the world to secure funding commitments for distribution rights can...
Oklahoma route 66 sign

A New Frontier in Filmmaking

5/5/2022
Oklahoma is becoming a production destination, thanks to new incentives and infrastructure programs.
contracting-in-a-covid-19-world-LC

Contracting in a COVID-19 World  

5/3/2022
The pandemic has affected how UK production companies contract crew. Here’s how to reduce the impact of...
Master Series Panelists-World Revenues, Foreign Sales, Senior Debt

Film Financing Explained: World Revenues, Foreign Sales, and Senior Debt

4/27/2022
Learn how working with agents, international distributors, and gap financiers can all factor into...
EP blog-square-tax day

Tips for Tax Day 2022

4/5/2022
Your ultimate tax filing checklist - the deadline this year is Monday, April 18th!

Georgia Proposes Capping and Prohibiting Sale of Film Tax Credits

3/30/2022
The changes, if signed into law, would cap the amount Georgia hands out in film and TV tax credits at $900...
Master Series Women in Animation-thumbnail

Women in Animation: A 3D View

3/24/2022
Marge Dean, Mandy Tankenson, and other women leaders from across animation come together to celebrate...
Bradley Cooper-nightmare alley

Meet the Assistant Director

3/16/2022
A conversation with Myron Hoffert ('Nightmare Alley')
EP Blog_SQUARE-Sound Mixer-Lora Hirschberg

Meet the Sound Mixer

3/1/2022
A conversation with Oscar-winning re-recording mixer, Lora Hirschberg ('Inception', Skywalker Sound)
meet-the-executive-producer-just-mercy-sq

Meet the Executive Producer

2/8/2022
A conversation with Mike Drake ('Just Mercy') on the path to becoming and EP, and the role of social...
Los Angeles Times logo-sq

Why the Cherokee Nation is Offering Rebates to Film in Oklahoma

2/5/2022
Joseph Chianese speaks to the LA Times on new incentive
Changes to UK right to work checks

Important Changes to UK Right to Work Checks

9/20/2022
On September 30, 2022 the UK rules around right to work checks will change. Here’s what productions need...
Topic: UK
More
EP-Newsroom-Below the Line-Thumbnail-480

Union Roundup: Production Incentives Experts Gather, Hoping Hollywood Can Bring Economic Recovery As We Learn to Live With Covid

9/6/2022
Entertainment Partners offered an update on U.S. Production Incentives for 2022. The seminar focused on...
Los Angeles Times logo-sq

Explaining Hollywood: How to get a job as a production accountant

8/10/2022
Mark Goldstein speaks to the LA Times about the high demand for production accountants
Canadian flag flying over Quebec City

5 Reasons to Consider Canada for Your Next Production

7/12/2022
Here's why Canada deserves a spot on every producer's shortlist.
Topic: Canada
More
EP Blog_SQUARE_Wes Hagen

Meet the Location Manager

7/7/2022
A conversation with award-winning location manager Wes Hagen ('Ozark,' 'Hidden Figures.')
EP Blog_Jesse Wente

Supporting Indigenous Storytellers of Canada

6/21/2022
How the Indigenous Screen Office (ISO) offers advocacy and funding for First Nations, Inuit, and Métis...
Topic: Canada
More
Sian Richards and Queen Latifah-square

A Face Kit for Every Skin Tone

6/14/2022
Hollywood makeup artist Siân Richards is transforming the makeup industry for actors of every shade.
AMPTP and  Unions Update  the Industry  Return-to-Work  Agreement

AMPTP and Unions Update the Industry Return-to-Work Agreement

5/25/2022
AMPTP and industry unions revised the Return-to-Work Agreement, effective May 1, 2022
EP Blog_SQUARE_Fighting Hollywood Stereotypes-TTEI

Fighting Stereotypes and Rethinking Representation

5/10/2022
How TTIE is advancing authentic storytelling in Hollywood by empowering historically excluded writers and...
terms-to-include-uk-contracts-LC

Terms to Include in UK Crew Contracts

5/3/2022
Common terms which studios and production companies include in their UK crew contracts.
Topic: UK
More
uk-gdpr-and-how-productions-reduce-exposure-LC

The UK GDPR and how Productions can Reduce their Exposure - Q&A with Sheridans

5/3/2022
Sheridans’ Associate Krishan Neelendra answers key UK GDPR questions from production companies and...
Topic: UK
More
cell phone with sticky note stating sign here

Six e-Consent Myths (and Why They’re Not True)

5/2/2022
Sheridans Associate, Sarmad Saleh, debunks some common e-consent myths.
Topic: Legal
More

Producing with Purpose

4/27/2022
Creative Producer, Kimberly Goodman ('Selling Sunset', 'Project Runway') shares insights on creating...
recycling conversation

Sustainability in Production: Q&A with Nikki Saunders

4/22/2022
Nikki Saunders on sustainable filming practices, COVID-19, and why carbon offsetting isn’t a...
EP Blog_The Race to Net Zero is On for Big Studios

The Race to Net Zero is On for Big Studios

4/20/2022
Film and television studios are embracing the green movement in a big way. Here’s what you can expect to...
EP Blog_SQUARE_meet the cinematographer-dan-laustsen

Meet the Cinematographer

4/12/2022
A conversation with Dan Laustsen ('John Wick', 'Nightmare Alley').
EP Newsroom-Thumbnail-480-the olympian

More Movies Could Soon be Filmed in WA as Inslee OKs Film Incentives Passed by Legislature

4/5/2022
The law will provide tax breaks for filmmakers looking to make movies in Washington
EP Blog_Marge Dean

Opening Career Doors

3/29/2022
How WIA President, Marge Dean, is shaping the future of animation and empowering underrepresented genders
Anthony De La Rosa-EVP-Residuals

Spotlight: Anthony De La Rosa, Executive Vice President, Residuals

3/8/2022
Meet EP’s resident residual domain expert, Anthony De La Rosa, and learn what inspired him to enhance and...

Russian Invasion Hits Ukrainian Production Industry Just Starting to Go International

2/24/2022
"Ukraine was just starting to open up to the world, now everything has closed up again."
Site Selection Magazine logo-sq

The Stage is Set

2/8/2022
Puerto Rico Beckons to Film & TV Production Industry
New York City Requires Paid Time Off for Parents/Guardians to Vaccinate Kids Against COVID-19

New York City Requires Paid Time Off for Parents/Guardians to Vaccinate Kids Against COVID-19

2/4/2022
New York City enacted a new law that requires employers to provide four hours of paid leave to employees...
California Updates Requirements for COVID-19 Exposure Notification and Reporting Requirements at the Workplace

California Updates Requirements for COVID-19 Exposure Notification and Reporting Requirements at the Workplace

2/4/2022
On October 5, 2021, California enacted AB 654, which immediately updated the COVID-19 exposure...
Cal/OSHA Readopts Emergency Temporary Standards, Effective January 14, 2022

Cal/OSHA Readopts Emergency Temporary Standards, Effective January 14, 2022

2/4/2022
While the readopted ETS still incorporates a myriad of the same safety protocols that appeared in the...
New York City Vaccine Mandate on Private Employers

New York City Vaccine Mandate on Private Employers

2/3/2022
Effective December 27, 2021, New York City implemented a new mandate on private employers to require all...
EP BLOG_Decoding-Your-Paystub-S

Decoding Your Paystub in 2022

2/2/2022
What deductions may look different in the new year

Payroll & Finances

PayrollResidualsSmartStartNew SmartTimeProduction PortalEP On LocationSmartAccountingEP LiveSmartPOCASHétPayPaymaster Rate GuideEP Residency

Manage Multiple Productions

AssetHubSmartHubSmartHub Vault
Subscribe now

Be an industry insider with EP's
newsletters and alerts

LegalPrivacy NoticeSecurity
© 2022 Entertainment Partners. All rights reserved.