In the fast-paced world of film, television, and streaming production, payroll is not just about cutting checks. It is the backbone of compliance, crew trust, and financial stability. Productions that mishandle payroll can face delays, fines, and union disputes that derail schedules and eat into budgets. Whether you are producing a major streaming series or a low-budget indie, avoiding payroll pitfalls is critical. Below, we’ll walk through the top five payroll mistakes that consistently cost productions time and money, along with strategies to avoid them.

1. Misclassifying Employees and Contractors

One of the most common and costly errors in entertainment payroll is misclassifying workers. Crew members are almost always employees under both union contracts and state labor laws. Treating them as independent contractors may seem easier on the front end, but it exposes productions to back taxes, penalties, and potential litigation.

The IRS, state tax agencies, and entertainment unions all closely scrutinize employee classifications. If a grip, electrician, or camera operator is issued a 1099 instead of a W-2, your production risks fines and could be liable for unpaid payroll taxes and union benefits. Beyond compliance, misclassification damages trust with your crew, making it harder to staff future projects.

Solution: Always treat union and crew hires as employees and run them through an Employer of Record (EOR) or payroll company familiar with entertainment industry rules. Reserve contractor classifications only for true independent professionals, such as a third-party VFX studio or licensed vendor, who operate outside production control.

2. Overlooking State and Local Jurisdiction Rules

Productions frequently shoot across multiple states, sometimes even multiple cities within the same week. Each jurisdiction comes with its own wage and hour rules, tax requirements, and benefit contribution standards. A crew member hired in California but working in New Mexico, for instance, may trigger compliance obligations in both states.

The cost of overlooking jurisdictional nuances can add up quickly. Productions may owe unpaid state taxes, miscalculate wages, or fail to follow overtime practices. Productions have also been fined heavily for failing to comply with local meal and rest period laws, especially in strict jurisdictions like California under Wage Order 12.

Solution: At the start of each production, map out every shooting location and hire state. Confirm with your payroll service which wage orders, state tax forms, and jurisdictional rules apply. Build systems for tracking where each employee works, not just where they were hired.

3. Ignoring Union Agreement Details

Union agreements, such as the IATSE Basic Agreement, SAG-AFTRA Basic Agreement, or DGA Basic Agreement, dictate wages, benefits, working conditions, and penalties. Misinterpreting or ignoring these provisions is one of the fastest ways for productions to lose money.

Common mistakes include:

• Miscalculating overtime when golden hours or double-time thresholds apply.
• Forgetting to pay night premiums or weekend rest penalties.
• Missing deadlines for health and pension contributions, which can trigger late fees or audits.

Even small oversights compound quickly. A missed penalty for one crew member across a 12-week shoot can turn into tens of thousands of dollars in unexpected costs.

Solution: Partner with a payroll company or labor consultant experienced in entertainment CBAs. Build a compliance checklist for each union on your production. Train your payroll accountant and coordinators to flag conditions such as meal breaks, night premiums, and turnaround violations before timecards are processed.

4. Late or Inaccurate Timecard Processing

In entertainment, timecards are the heart of payroll. Late submissions, incomplete data, or miskeyed hours can throw off the entire weekly cycle. When timecards are not processed correctly, productions risk missed paydays, crew dissatisfaction, and costly adjustments later.

Delays also create ripple effects. If timecards are not finalized, payroll companies cannot issue edits, fringe contributions may not be remitted on time, and accounting departments lose visibility into cash flow. Worse, late or incorrect paychecks may violate state payday laws, exposing the production to penalties.

Solution: Set a strict timecard submission schedule, for example Monday morning for a Thursday payday, and enforce it consistently. Invest in digital timecard systems that automatically calculate overtime and penalties. Assign a payroll accountant or clerk to review every card for errors before submission to the payroll service.

5. Failing to Budget for Fringes and Benefits

One of the biggest surprises for new producers is the cost of fringes, which include employer taxes, health and pension contributions, workers’ compensation, and other union benefits. Productions that fail to accurately budget for fringes often find themselves over budget mid-shoot, scrambling to cover obligations they did not anticipate.

Fringe rates vary by union, state, and production type. For example, Motion Picture Industry Pension & Health (MPIPHP) are a complex combination of a percentage and a flat rate, and some guilds require direct deposits into benefit plans within a matter of days. Missing or underfunding fringes not only jeopardizes compliance but also risks union grievances or benefit fund audits.

Solution: Before production begins, build a detailed labor budget that includes wages plus accurate fringe percentages for every covered position. Confirm current contribution rates with payroll companies or benefit funds. Treat fringes as non-negotiable costs to avoid unpleasant mid-production surprises.

Final Thoughts

Productions succeed when payroll runs smoothly. Mistakes in classification, jurisdiction, union compliance, timecard processing, or fringe budgeting do not just cost money, they disrupt schedules, erode crew trust, and open the door to audits or lawsuits. The good news is that every one of these pitfalls is preventable with preparation, clear processes, and the right partners.



By prioritizing payroll compliance, productions protect their budgets, strengthen relationships with their crews, and keep the cameras rolling without unnecessary setbacks. Whether you are an indie producer or managing a studio-level series, investing in payroll accuracy is not just good practice, it is good business.