True story: My very first real budget I did for a Producer/Director who is huge. I was beyond nervous. When his producing partner gave me the OK to build the budget for a unit of the shoot, I was ecstatic. I told her that I was ready to do it and that it would be great. Beyond all the obvious points of trying to figure it all out under the gun (complete trial by fire), I was told to 'ensure the fringes are correct'. "Of course!", I quickly responded with, "No problem. They will be!"
Then I said to myself, "What are fringes?"
Fringes are all those taxes and additional fees you need to tack on to the rates for a person. Primarily, it's the 'Employers Tax' and contributions to any applicable unions and/or guilds. When starting to put together a budget, you will want to triple check the tax rates for the state (or country) you are shooting in for crew payroll, in addition to reviewing all the various contributions you might need to make on behalf of the employees. Your payroll service and whichever unions you are working with should help ensure you are using the correct rates. Below, you will see the most common ones - but is by no means a complete list.
These taxes should be assigned to all crew, regardless of where you shoot. Also, if you shoot internationally, you are still liable to include them for crew per their home country. While the links here are focused on the USA, you should check for any other countries you might be working in (or crew from other places).
- Federal Unemployment Insurance (FUI) | A levied tax to cover and help augment local state UI.
- OASDI | (FICA 1) It is the fancy term for Social Security taxation.
- Medicare | (FICA 2) Payment forward for health coverage for those 65 years old and above.
These vary, and you need to pay particular attention to them and ensure you attribute the correct taxes to the crew depending on where they are from.
- State Unemployment Insurance (SUI) | This is a payment made to the persons individual SUI account.
- FUTA | While this is technically a Federal tax augmentation, it is assessed at the state level. Due to many states defaulting on their Unemployment Insurance loans from the government, many states now levy this added tax to help payback the costs.
These are additional fees which your payroll company will add-on to cover the following.
- Payroll Fee | This is the cost for their services. Could be anywhere form .5% to 1.5%. Also, there are often different fees for loanout crew, vs, straight payroll.
- Workers Compensation Coverage | This is the cost to cover the crew in the event of injury. Most of the time, they are different for different types of crew. People on the set, are different than people in the office and those are different than actors. Also, if you work overseas, then you should also expect some additional fee for shooting on foreign soil.
PERCENTAGE vs. UNIT FRINGES
There are two methods of assigning fringes and fees to line items in your budget, most usually - crew.
- Percentage Method | Tagging a line calculates a defined percentage of the overall total of the line.
- Unit (Flat) Method | Uses the defined hour, day or week hours as a basis to calculate the accrued total.
CEILINGS (also called a Cut-Off)
In the set-up for fringes (Movie Magic), there is a field where you can define the cut-off for a particular fringe. This is the top end of pay which you are required to pay fringe in. To say that hopefully less confusingly, if a ceiling on a fringe of 6.2% is $7000 - then once the person makes more than $7000 you are no longer required to pay that fringe/tax. Movie Magic's Cut-Off field takes this ceiling into account and automatically calculates the overall spend and only attributes the percentage to those monies upto that amount.