About EPEP StoreEP BrandsSupportCommunityNews & Info
Blog Home

Everything You Need to Know About End-of-Year Production Payroll Cleanup

Reconciling payroll errors and generating accurate W-2s can be a tedious process. These proactive steps can help you to lessen the burden.

November 30, 2021

Becky Harshberger

EP BLOG_Payroll_Cleanup_Becky_Harshberger.jpg

The December 15th deadline for W-2 adjustments is rapidly approaching, and it’s time to tackle your end-of-year accounting to-do list! As Certified Payroll Professional with 22 years of experience, I’ve been through a payroll clean up or two. Below, I’ll share actionable steps you can take to successfully reconcile your 2021 production payroll.

In this post, we’ll discuss:

  • Why year-end payroll cleanup is important
  • Common payroll issues to watch for 
  • How errors are corrected (and what happens if one goes undetected)
  • Proactive steps you can take to minimize payroll issues

Watch the Master Series webinar: Best Practices for Year-End Payroll Cleanup

Why Payroll Cleanup is Important

Here’s a frustrating but inevitable truth; payroll errors happen. Especially in a year like 2021, when production has been at an all-time high, and accounting teams are feeling the effects of seemingly endless long days. 

Production workers expect a perfect W-2, even though they rarely (if ever) scrutinize their own pay stubs to verify their tax deductions and direct deposits are accurate. So, when payday errors go undetected, your team is left scrambling to report issues to ensure the cast and crew members get an accurate W-2 at the end of the year.

Payroll issues that occur due to an inaccurate withholding or even a simple clerical error can significantly impact production workers. Worst case, they can even result in big-time issues for the production itself. 

What’s the best way to avoid all these challenges? Be proactive.

Common Payroll Errors to Watch For

As you conduct your year-end payroll review, watch for these common issues:

  1. Pre-filled timecard mistakes: If you’re filming in multiple locations, pre-filled timecards can make things much easier on you. Unfortunately, it’s very easy to accidentally pick up a paper from the wrong pile and inadvertently tax someone in the wrong work state.
  2. Missed withholdings on mid-production incentive state loan outs: This happens most often during a hasty one-or-two week stop on location, and it can wreak havoc on your reconciliation process. Be sure to pre-plan for any mid-production loan outs.
  3. Escrow and advance withholdings: It’s easy to forget withholdings on escrow funds and advances, especially if EP didn’t do the initial payout and tax calculation. When this happens, you may have to do a gross-up, which is a cost to production.
  4. Depositing tax in a state that doesn’t allow you to: In some states, your accounting team can’t deposit payroll tax; your payment processor has to do it. Make sure you verify state tax rules before you initiate a deposit.

Other things that can throw your books out of alignment are late charges for pension, health, and welfare tax, assuming a box rental doesn’t have a withholding when it does, and confusion around the application of ridiculously complex state tax laws.

These issues don’t just impact individuals; an entire production may suffer from an accounting error. For example, an erroneous state tax calculation could result in a lower film incentive payout than anticipated. Film productions count on incentive money, and mistakes like this can throw their budget off balance.

Successfully avoiding these common payroll pitfalls comes down to cast and crew accountability and having good processes and checks and balances. 

What Happens When a Payroll Issue Inevitably Arises?

Here’s what goes on behind the scenes at EP when a payroll error is reported:

  • EP receives a call from a production worker who reports an error
  • Our team verifies the crew member’s report with their production accounting team
  • In some cases, EP requests a new timecard to make sure there’s an accurate paper trail
  • Our team keys an adjustment within our system
  • EP generates the appropriate paperwork (W-2 or W-2C) to reflect the adjustment

Once the issue is addressed, trust but verify. If you've asked us to fix something, check and make sure we keyed exactly what you wanted us to key, and the edit you requested is what you expected to see.

Due to high volume, EP has issued a December 15th, 2021 deadline for W-2 adjustment requests. As long as you request any changes by this date, we’ll be able to make the correction before we cut W-2s. If you send in requests after December 15th, the adjustment may not be keyed prior to the creation of the W2 and your crew member may end up with a W-2 and a W-2C.

Understanding W-2Cs

A W-2C, or corrected W-2, gets created based on an adjustment. Though these two forms have deceivingly similar names, they’re actually quite different. 

  • A W-2 lists out all your earnings and deductions for the year
  • A W-2C exists for the solitary purpose of documenting a correction made to a W-2

Note: EP does not upload the W-2C to our electronic W2 website; it has to be delivered through the mail or encrypted email.

If an error is discovered, it’s important to let your crew know that they need to hang on to their original W-2. A W-2C is not a replacement for that form; it’s an addendum. The only information listed on a W-2C form is the adjustment - or what’s wrong with the original form. All the other information on the W-2 is still needed to file taxes accurately.

As long as your crew member receives a W-2 and a W-2C by the tax filing deadline, they can file their taxes as usual. They’ll just need to use the corrected information (found on their W-2C) when they fill out their return.

What Happens if an Error Sneaks Through to 2022? A missed payroll error can result in a production worker needing to file an amended return, which could result in added costs if the worker uses a CPA to update their filing. The worker may also experience tax refund delays.

Proactive Steps You Can Take to Avoid Payroll and W-2 Issues

The best way to avoid payroll issues is to be curious and vigilant. Your production accounting team should get into a habit of checking every little detail twice before payments are processed. It’s also important to get buy-in from your crew and transfer some of the responsibility for ensuring accuracy to loan out owners and production staff.

For example, you can send an internal communication to make your team aware of film incentive requirements. Provide details and explain exactly what they need to verify on each paystub (ie. confirm is that the incentive state withholding is correct). Be sure to emphasize that every payment issued needs to be double-checked for accuracy.

Team members should verify the following:

  • Is all their personally identifying information (PII) correct? 
  • Did they work or live in the states that have withholding?
  • Did they pay local taxes? Should they have paid local taxes?

Having crew members review these details on every check will dramatically reduce your likelihood of having to reconcile year-end errors. Ten extra minutes today can save you a massive headache brought on by hours of future work.

Payroll Tools For Your Crew

Make sure your production team is using the tools available to them to verify their paychecks. In minutes, anyone on your team who gets paid by EP can sign up for MyEP and run payroll reports to check for any issues. Here's how you do it

If anything seems off, encourage your crew to ask questions and try to instill a ‘see something, say something’ mentality. It’s to their benefit to be proactive, and it’s far easier for you to field in-the-moment questions than to retroactively reconcile a missed error.

If loan out withholding errors are found in post, call EP as soon as possible. We’ll talk to the actor’s CPA and will work the problem to get everyone to a speedy solution. You can also contact taxsupport@ep.com.

Most importantly, lean on your partnership with EP. Our goal is to offer as much proactive support as possible to help you streamline your payroll and minimize errors.

It takes a village, and we’re a team, working together for accurate payroll.

Topic: Payroll

Related Content

film-budget-meeting-sq

Why Accurate Payroll Tax Withholding Matters to Film Budgets

11/16/2021
Wendy Black, EP’s Vice President of Incentive Operations, shares tips for ensuring your production...
More
Best Practices for Year-End Payroll Cleanup-Panelists-sq

Best Practices for Year-End Payroll Cleanup

11/15/2021
Payroll tax expert Becky Harshberger shares best practices to help production accounting teams prepare for...
Master Series Thumbnail-Best practices for accurate payroll tax withholding

Best Practices for Accurate Incentive Payroll Tax Withholding

10/22/2021
Learn how payroll tax withholding impacts a production incentive or film tax credit, and how productions...
5 top payroll tax errors-Becky Harshberger

5 Top Payroll Tax Errors and How to Prevent Them

9/28/2021
Production payroll can be a daunting task, but it doesn’t have to be! Payroll Tax expert Becky Harshberger...
Canadian flag

5 Things to Know Before Working in Canada

8/31/2021
Prepare for your next job in Canada with this checklist of payroll considerations
Topic: Canada
More
 Adjusting the W4-Becky Harshberger-Sq

How to Adjust Your Tax Withholdings Using the New W-4

8/17/2021
Making small adjustments throughout the year can save production workers big at tax time!

PayTalk: The Recipe for a Successful Payroll 2022 (Part One)

1/13/2022
Davida Lara joins the PayTalk podcast to share strategies for leading successful teams
creating-a-winter-wonderland-elf

Creating a Winter Wonderland

12/21/2021
How ‘Elf’ Production Designer, Rusty Smith, Produces the Perfect Snowy Scenes for Film and Television
2022 Budgeting-sq

Budgeting for 2022: A Production Accountant's Guide

12/15/2021
EP's Payroll Tax, Production Incentives, and Business Development experts explain how inflation,...
Master Series: Budgeting for 2022-1

Budgeting for 2022: What Productions Need to Know

12/10/2021
From unemployment taxes and worker's compensation to the price of labor and materials, production costs...
Shiran-Amir-Randy-Bricker-Meet-the-Editors

Meet the Editor

12/7/2021
‘Chucky’ editors Randy Bricker and Shiran Amir on navigating the entertainment industry and how they...
john hadity-beginners guide to hybrid film financing

The Beginner's Guide to Hybrid Film Financing

11/3/2021
How to successfully navigate working with foundations and investors to finance your next social-impact...
John Hadity-Sandra Schulberg-Hybrid Financing Master Series

Film Financing Explained: Hybrid Financing

10/27/2021
Sandra Schulberg joins John Hadity for a spirited discussion on Hybrid Financing and how filmmakers can...
Identity Security Film Production-sq

Identity Security in Production

10/13/2021
5 Strategies to Manage Risk and Resist Cyberattacks in the Entertainment Industry

Meet the Paymasters

9/9/2021
The hard-working payroll professionals behind Hollywood's paychecks

Film Financing Explained: Soft Money Financing

9/2/2021
Vivian Hua joins our panel of financing and incentive experts to discuss funding film and television...
 John Hadity-Guide to Soft Money Financing-sq

The Beginner’s Guide to Soft Money Financing

8/25/2021
How filmmakers can capitalize on incentives, film funds, and more to finance their next project

5 Things to Know Before Relocating for Your Next Job

7/20/2021
What production workers need to consider before moving to a new state
Equity Financing Panel-thumbnail

Film Financing Explained: Equity Financing

7/15/2021
James Schamus and Michael Helfant join our panel to share expert advice on funding film and television...

The Beginner’s Guide to Equity Financing

7/15/2021
Expert advice to help producers secure funding for their next project

Getting a New Start

6/1/2021
Davida Lara shares tips on transitioning into your next role

Meet the Production Accountant

5/18/2021
From budgeting, to billing, to payroll, the financial powerhouse behind every production

The Beginner's Guide to Federal Payroll Tax Withholding

5/11/2021
Essential information for individual production workers

Meet The Costume Designer

5/4/2021
From sketching to fittings to final looks, Shawna Trpcic ('The Mandalorian') and Michael Wilkinson...

Winning Payroll Solutions Start with the Right Team

4/1/2021
Davida Lara on why the people who make up a payroll team are critical to delivering results
Pantea Ahmadi and Joe Scudiero

SB 973's Impact on the Entertainment Industry

3/15/2021
How California’s new pay data reporting legislation, SB 973, applys to the entertainment industry
Topic: Legal
Watch

Payroll Tax Changes and the New Form 1099NEC

2/26/2021
What you need to know before filing for the 2020 tax season

The Beginner's Guide to Production Incentives

2/17/2021
EP helps filmmakers navigate the complex world of film and television incentives
35-production-accounting-terms-feature

35 Production Accounting Terms You Should Know

1/11/2022
Ready to test your production accounting vocabulary knowledge? See how many of these 35 common terms you...
Virtual-production-stage

The Future of Film and Television Production

1/4/2022
Virtual stages, remote production offices, and other advances in technology drive the evolution of...
New York State Makes Retirement Savings Program Mandatory Through Payroll Deduction

New York State Makes Retirement Savings Program Mandatory Through Payroll Deduction

12/21/2021
New York state employers that do not offer a qualified retirement plan will soon be required to...
Kickstart-with-ep-academy

Kickstart Your Production Career with the EP Academy

11/23/2021
From Production Accounting basics to technology certifications, EP’s online courses offer one-of-a-kind...
Psychology-of-terror-steve-wang-todd-masters-feature

The Psychology of Terror

10/29/2021
How our deepest personal fears inspire cinematic monster makers Todd Masters and Steve Wang
woman-man-filming-production-sq

Mission: NOT Impossible

10/20/2021
Production incentives give producers options, increase infrastructure development and jobs promoting...
Christine Davila, Jairo Alvarado, Sonia Gambaro

Authentic Latinx Storytelling Starts with Inclusion

9/22/2021
Christine Dávila, Jairo Alvarado, and Sonia Gambaro work to amplify the talents of underrepresented...

Streamers and the Changing Landscape of Film Distribution

9/14/2021
Director/Producer Daniel Farrands on strategies for success in the time of VOD

How to solve a compounding problem?

9/8/2021
The perennial shortage of production accountants has been made worse by the competition for resources, but...

New Terms Under Return-To-Work Agreement

8/30/2021
RTW extension includes new two-part delineation, and the role of the vaccine
Topic: Legal
More

Designing for Horror

8/13/2021
Daniel Farrands and Andrew Murdock share insights on how filmmakers create fear through visual techniques
Rate-In-Effect Permitted As Alternative to Weighted Average For Overtime with Multi-Pay Rates

Rate-In-Effect Permitted As Alternative to Weighted Average For Overtime with Multi-Pay Rates

8/9/2021
The California appellate court in Levanoff v. Dragas upheld the employer’s use of rate-in-effect, citing...
California Supreme Court Surprises Employers on Penalty Rate Used for Meal and Rest Break Violations

California Supreme Court Surprises Employers on Penalty Rate Used for Meal and Rest Break Violations

8/9/2021
In mid-July, the California Supreme Court issued a long-awaited decision concerning the correct payrate...
Paul Beyers prop master on set

Meet the Prop Master

7/28/2021
From script to screen, the creative mind behind the props from film and television; featuring Prop Masters...
Anthony De La Rosa EP Residuals

The Beginner's Guide to Film and Television Residuals

7/7/2021
Important details every producer should know as they budget for their next project

Global Expansion and the Strategic Partnership With Payroll

7/1/2021
Payroll Operations and Data Considerations when Making Strategic Growth Decisions
Celebrating Pride Month Panel

Celebrating Pride Month and LGBTQ+ Film and Television

6/24/2021
Celebrate Pride month with us as our panel of groundbreaking producers and activists discuss the past,...

Diversifying Hollywood Through Better Hiring and Training

6/22/2021
How new legislation and production incentives are promoting diversity and inclusion

Meet the Producer

6/15/2021
From concept to the red carpet, the producer is there to keep the production moving forward
Sarah Westman-liu and Jennifer Liscio

Canadian Incentives and Legislation News

6/10/2021
The latest updates on incentives, CRA guidance on COVID-19 related costs, and more!
actors on set

Safety on Set Amid Changing COVID-19 Guidelines

6/9/2021
What productions should know as they head back to work

Choosing the Right Production Incentives

6/2/2021
5 questions to ask when selecting your next incentive-based filming location

The Path to Better Diversity and Inclusion in Hollywood

5/25/2021
How production incentives are helping to promote inclusivity

Global Payroll Titan Award 2021

4/29/2021
Davida Lara, CPP, named this year's Global Payroll Titan
Spotlight on Georgia Production Panel

Spotlight on Georgia: The Producers' Perspective

4/28/2021
A dynamic group of producers, industry experts, and incentive specialists discuss the state of production...

Innovations in Production Incentives

4/27/2021
How emerging local initiatives are driving productions to new jurisdictions

Spotlight: Joseph Chianese, Film Production Incentives Expert

4/20/2021
Meet the SVP and Practice Leader of Production Incentives at EP

COVID-19 and the Impact on State Unemployment Insurance

4/13/2021
How high unemployment claims have led to increased SUI rates across the US

The Beginner's Guide to Production Financing

4/6/2021
What to know before starting your next film or television project
Producing through COVID women producers panel

Producing Through COVID-19: A Discussion with Six Prominent Women Producers

3/25/2021
Stories of navigating the entertainment industry and producing during a pandemic

SB 973, California Pay Data Reporting Law FAQs

3/6/2021
The new pay data reporting law and its impact on the entertainment industry

Spotlight: Davida Lara, Executive Vice President, Payroll Services

2/18/2021
Meet the dynamic leader who challenges what it means to be in payroll

Digital Production Studio

Production Finance StudioProduction Management StudioEnterprise Management Hub

EP Sites

Central CastingEntertainment PartnersEP StoreSyncOnSetThe Production CommunityWe Got POP
Subscribe now

Be an industry insider with EP's
newsletters and alerts

LegalPrivacy NoticeSecurity
© 2022 Entertainment Partners. All rights reserved.