News & InfoEP StoreAcademySupportCommunityProducts by Country
Blog Home

Why Accurate Payroll Tax Withholding Matters to Film Budgets

Wendy Black, EP’s Vice President of Incentive Operations, shares tips for ensuring your production receives eligible incentives and credits
November 16, 2021
film budget meeting

Preparing for production is one of the busiest times of a project! There are so many moving parts to track, from location scouting to hiring crew. And although mistakes can happen, it’s important to safeguard your financials along the way. Accurate payroll tax withholding is one area production can’t afford to overlook because it can jeopardize whether you receive a tax incentive or film tax credit and significantly impact your overall budget.

Incentives Expert and Entertainment Partners' VP of Incentive Operations, Wendy Black, shares this guide to help clients effectively plan for a successful audit and never miss out on receiving those important incentive dollars.

Start With the Right Questions

As your production is getting off the ground, remember to ask these three questions:

1. How will payroll impact my production incentives?

Many productions choose to film in a certain jurisdiction based on the production or tax incentives offered by that location. In many cases, in order to qualify for those incentives, a production needs to withhold taxes on specific individuals or loan-outs and remit that income tax  to the state. If there is a failure to report and remit  the income tax withholding, then a production can lose the tax incentive related to that crew member or cast’s labor costs.

2. Who requires tax withholding?

Every jurisdiction has different legislation that impacts how much tax and who needs taxes withheld from their paycheck and remitted. Tax withholding often impacts a loan-out: individuals who set up a corporation in order to capture certain tax benefits. Because loan-outs are not working as individuals, their tax withholding is not automatic and withholding has to be triggered through a manual process. This can potentially leave room for large errors if not communicated or not communicated correctly to the paymaster.

3. What is the timeline to remit taxes?

Many jurisdictions are getting stricter about allowing late payments or adjustments, and this will cause a production to lose out on a tax incentive if not paid on time. Typically, the time to remit taxes is monthly or quarterly, but if you’re working with EP, our goal is to have all withholding processed in the at the time the employee is originally paid.

Avoid the Most Common Withholding Errors

Each jurisdiction has different incentive programs which are dictated by legislation. Productions often run into issues at the time their incentives are audited due to mistakes related to missed or inaccurate withholding. This can happen for a variety of reasons. Productions are busy, and sometimes communication breaks down between the production and payroll, especially when it comes to accurately identifying the location and knowing when to withhold.

Remember these best practices to help ensure your show is capturing withholding correctly:  

  • Review any specific requirements when filming in a state with a production incentive. Make sure you understand what they require and who it applies to (BTL, ATL, residents, non-residents, loan-outs, etc).
  • Advise your paymaster if you are filming in a production incentive state.
  • Send the paymaster a list of all loan-outs and individuals requiring special withholding.
  • Notify your paymaster if any loan-out companies or individuals do not require special incentive withholding.
  • Alert your paymaster to any changes or additions affecting the production talent or crew.
  • Ensure the proper work location is listed daily on the timecards, especially if you are working in multiple locations.
  • Batch anyone requiring special withholding separate from regular payroll.
  • Review all edits before releasing any payroll.

There is no 100% fool-proof way to ensure you’re capturing all qualified spend. Mistakes can happen. But strong communication between the production and paymaster can be key to reducing errors and ensuring accurate payroll tax withholding. For additional help on how to approach payroll when payroll withholding is required as it relates to incentives, download our withholdings best practices checklist.

Key Takeaways

  • Understand the incentive rules of the jurisdiction a production is working in and if there are any special withholding requirements.
  • Communicate those requirements to the person processing the payroll.
  • Communicate any errors to your paymaster immediately so they can make adjustments.
  • Follow up to ensure that the withholding actually happens before the payroll gets submitted, not later when a crew member or talent has completed their work on the project.

For more information on how to properly plan for withholding of your crew and loan-outs in incentive jurisdictions, watch our Master Series webinar: Best Practices for Accurate Incentive Payroll Tax Withholding. If you have any questions about specific incentives or withholding requirements in specific incentive states, please contact the Incentives Group at or (818) 955-6050. Our Tax Support team is also available at or (818) 480-7333 to answer questions or resolve issues around withholding on a specific invoice or project. As your production partner we want to ensure correct withholding and state reporting, so your production is set up for success!

Related Content

Master Series Thumbnail-Best practices for accurate payroll tax withholding

Best Practices for Accurate Incentive Payroll Tax Withholding

Learn how payroll tax withholding impacts a production incentive or film tax credit, and how productions...
EP Blog_SQUARE-Tips for tax day

Tips for Tax Day 2022

Your ultimate tax filing checklist - the deadline this year is Monday, April 18th!
International Financing-John Hadity-ft

The Beginner’s Guide to International Film Financing

What to know before you begin an international financing plan
2022 Budgeting-sq

Budgeting for 2022: A Production Accountant's Guide

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

From unemployment taxes and worker's compensation to the price of labor and materials, production costs...
EP BLOG_Payroll_Cleanup_Becky_Harshberger_sq

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...
Best Practices for Year-End Payroll Cleanup-Panelists-sq

Best Practices for Year-End Payroll Cleanup

Payroll tax expert Becky Harshberger shares best practices to help production accounting teams prepare for...
5 top payroll tax errors-Becky Harshberger

5 Top Payroll Tax Errors and How to Prevent Them

Production payroll can be a daunting task, but it doesn’t have to be! Payroll Tax expert Becky Harshberger...

Film Financing Explained: Soft Money Financing

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

How filmmakers can capitalize on incentives, film funds, and more to finance their next project
Oklahoma route 66 sign

A New Frontier in Filmmaking

Oklahoma is becoming a production destination, thanks to new incentives and infrastructure programs.

Georgia Proposes Capping and Prohibiting Sale of Film Tax Credits

The changes, if signed into law, would cap the amount Georgia hands out in film and TV tax credits at $900...
EP Newsroom-Thumbnail-Portland Business Journal

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

A new Oregon film and media incentive law could draw more movie productions to the state.
Master Series Women in Animation-thumbnail

Women in Animation: A 3D View

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

Meet the Assistant Director

A conversation with Myron Hoffert ('Nightmare Alley')
International Film Financing panel-featured

Film Financing Explained: International Financing

International production experts discuss how producers can utilize financing systems outside of the US,...
EP Blog_SQUARE-Sound Mixer-Lora Hirschberg

Meet the Sound Mixer

A conversation with Oscar-winning re-recording mixer, Lora Hirschberg ('Inception', Skywalker Sound)
Digging Out of a Deficit-featured

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

Federal and State Unemployment Insurance rates are rising. Learn how these changes will affect 2022 and...

Meet the Executive Producer

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

Joseph Chianese speaks to the LA Times on new incentive
EP BLOG_Decoding-Your-Paystub-S

Decoding Your Paystub in 2022

What deductions may look different in the new year
EP Blog_SQUARE_Island Incentives

A Ticket to Paradise

Island Incentives Bring Productions Ashore

Meet the Set Decorator

A Conversation with Claire Kaufman ('Little Women')

Creating a Winter Wonderland

How ‘Elf’ Production Designer, Rusty Smith, Produces the Perfect Snowy Scenes for Film and Television

Meet the Editor

‘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

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

Sandra Schulberg joins John Hadity for a spirited discussion on Hybrid Financing and how filmmakers can...

Mission: NOT Impossible

Production incentives give producers options, increase infrastructure development and jobs promoting...
Identity Security Film Production-sq

Identity Security in Production

5 Strategies to Manage Risk and Resist Cyberattacks in the Entertainment Industry
Canadian flag

5 Things to Know Before Working in Canada

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

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

Making small adjustments throughout the year can save production workers big at tax time!
Bloomberg tax logo-Newsroom-Thumbnail

Remote Workforces Create New Employment Challenges for Employers

Employers should be aware of any local tax obligations for employees working remotely.
EP Blog_SQUARE_World Revenues

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

Learn how shopping your project around the world to secure funding commitments for distribution rights can...
EP Blog_SQUARE_Fighting Hollywood Stereotypes-TTEI

Fighting Stereotypes and Rethinking Representation

How TTIE is advancing authentic storytelling in Hollywood by empowering historically excluded writers and...

Contracting in a COVID-19 World  

The pandemic has affected how UK production companies contract crew. Here’s how to reduce the impact of...

Terms to Include in UK Crew Contracts

Common terms which studios and production companies include in their UK crew contracts.
Topic: UK

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

Sheridans’ Associate Krishan Neelendra answers key UK GDPR questions from production companies and...
Topic: UK
KJ Lamb and Simon Donovan

Empowering the Next Wave of Production Accountants

The EP Production Portal team was delighted to participate in the biannual Netflix Assistant Production...
cell phone with sticky note stating sign here

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

Sheridans Associate, Sarmad Saleh, debunks some common e-consent myths.
Topic: Legal
Master Series Panelists-World Revenues, Foreign Sales, Senior Debt

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

Learn how working with agents, international distributors, and gap financiers can all factor into...

Producing with Purpose

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

Sustainability in Production: Q&A with Nikki Saunders

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

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

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

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

Opening Career Doors

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

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

"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

Puerto Rico Beckons to Film & TV Production Industry

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

Davida Lara joins the PayTalk podcast to share strategies for leading successful teams

35 Production Accounting Terms You Should Know

Ready to test your production accounting vocabulary knowledge? See how many of these 35 common terms you...
Future-of-production-virtual stages

The Future of Film and Television Production

Virtual stages, remote production offices, and other advances in technology drive the evolution of...

Kickstart Your Production Career with the EP Academy

From Production Accounting basics to technology certifications, EP’s online courses offer one-of-a-kind...

The Psychology of Terror

How our deepest personal fears inspire cinematic monster makers Todd Masters and Steve Wang
Christine Davila, Jairo Alvarado, Sonia Gambaro

Authentic Latinx Storytelling Starts with Inclusion

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

Streamers and the Changing Landscape of Film Distribution

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

Meet the Paymasters

The hard-working payroll professionals behind Hollywood's paychecks

How to solve a compounding problem?

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

New Terms Under Return-To-Work Agreement

RTW extension includes new two-part delineation, and the role of the vaccine
Topic: Legal

Designing for Horror

Daniel Farrands and Andrew Murdock share insights on how filmmakers create fear through visual techniques

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.