# Payroll company

Source: https://storiara.com/glossary/payroll-company
Last updated: 2026-09-14
Author: Charles Hirschhorn, Storiara

> A payroll company in film and TV is a specialized service that processes time cards, calculates wages under union and state rules, withholds and pays payroll taxes, remits union pension and health contributions, and often provides workers' compensation by acting as employer of record. Productions fund payroll in advance and pay a handling fee.

## What a weekly payroll cycle looks like

1. Crew submit [time cards](https://storiara.com/glossary/time-card) at the end of the week; the [payroll accountant](https://storiara.com/roles/payroll-accountant) checks them against the [daily production report](https://storiara.com/glossary/daily-production-report).
2. Time cards go to the payroll company, which calculates [overtime](https://storiara.com/glossary/overtime), meal penalties, and union premiums.
3. The payroll company sends an invoice for gross wages plus fringes and fees.
4. Production wires the funds.
5. Checks or direct deposits go out, and union benefit reports are filed.

## The invoice, worked out

For a week with $86,000 in gross wages, using the payroll company's quoted rates for a non-union crew in one state:

| Line | Rate | Amount |
|---|---|---|
| Gross wages | | $86,000.00 |
| Employer FICA (Social Security and Medicare) | 7.65% | $6,579.00 |
| FUTA and state unemployment (quoted combined) | 3.50% | $3,010.00 |
| Workers' comp | 2.80% | $2,408.00 |
| Handling fee | 0.75% | $645.00 |
| **Funding required** | | **$98,642.00** |

The 7.65% FICA rate is set by the IRS (6.2% Social Security plus 1.45% Medicare). The other rates here are sample quotes; yours will depend on the states, the unions, and the company. Total fringe load: 7.65 + 3.50 + 2.80 + 0.75 = 14.70%, and $86,000 x 1.147 = $98,642.

## Start paperwork is where it begins

Nobody gets paid without [start paperwork](https://storiara.com/glossary/start-paperwork): the deal memo, I-9 identity documents, W-4 and state withholding forms, and union forms. For people paid through a [loan-out company](https://storiara.com/glossary/loan-out-company), the payroll company collects the loan-out's documents instead. Late or missing paperwork is the usual reason a crew member's first check is late.

## Budget and cash flow

Payroll companies usually require funding before they release checks, so payroll appears in the [cash flow schedule](https://storiara.com/glossary/cash-flow-schedule) one week ahead of when crew actually receive it, and some require a deposit at setup. Their quoted rates also become the fringe setup in the budget; see [fringes](https://storiara.com/glossary/fringes). If the production works in several states, get rates for each state, since unemployment tax and comp rates differ.

## Frequently asked questions

### Why use an entertainment payroll company instead of a regular one?

Film payroll involves union rules like golden time, meal penalties, and multi-state work, plus guild benefit reports and residuals. SAG-AFTRA's Ultra Low Budget agreement requires payments to go through a payroll house experienced in the entertainment industry.

### What is an employer of record?

The legal employer for tax and workers' comp purposes. Many entertainment payroll companies take this role so a short-lived production company doesn't have to register as an employer in each state or buy its own comp policy.

### How much does a payroll company charge?

Usually a handling fee as a percentage of payroll, plus the actual taxes and insurance, all quoted as a fringe rate per state and union. Get a written rate quote during prep and build it into the budget's fringes.

## Sources

- [SAG-AFTRA Ultra Low Budget Project Agreement (sample, rev. 3.21.23), payment requirements](https://www.sagaftra.org/sites/default/files/Ultra%20Low%20Budget%20Project%20Agreement%20(UPA)%20Rev.%203.21.23%20SAMPLE.pdf)