How to Pay Your Crew
One of my favorite parts of producing is getting to pay my crew. The film business is, after all, just that–a business–and being able to help people pay their bills feels pretty good. Of course, since we so often time live in the independent world of spec ads, passion projects, and favors, payment does not happen every day. But we’re not going to focus on those projects! Today I’d like to share some of my experience on how to deal with managing paying people, as an independent producer.
Here’s my first piece of advice: when given a budget, think of it as a budget. It can be very tempting to look at a large chunk of cash, that you have the ability to line item as you will, and try to keep as much of the pie for yourself. This is, for the most part, the wrong way to go about it. You’ve been given a budget in order to create the best possible product you can. If you start getting greedy and try to wear a bunch of hats, you are most likely doing a disservice to the client. You may be a gifted producer/director, or a director/DP, but once you get into director/boom op territory, you know you’re probably doing something wrong. So be sure to hire an appropriate sized crew as needed, and don’t be afraid to make a dent in your budget.
Next, figure out percentages ahead of time. When dealing with specs, sorting out the deferred pay situation may sometimes slip through the cracks. Take it from me when I tell you that it will almost always be messier later. Up front, you have bargaining power. You are the producer, and as long as you offer a fair part of the pie, no one should have anything to feel sore about (just make sure that whatever you agree upon is done on paper somehow–email, twitter, text if you have to. Just have some written, contractual proof). However, wait until after the services have been rendered, and you’ve got yourself a grade-A, certified Kosher pickle. This will, more often than not, result in hurt feelings, a ruined relationship, and a bad taste in everyone’s mouths. In a word: sour.
Manage expectations. Just as you will be emailing your client after two or three weeks have gone by and payment has not been rendered (hey, Ilya here, just wanted to see if you guys had a chance to get that check out?) your crew will check in with you periodically, with escalating frustration. Assure them that you have not skipped town, and are simply waiting on payment. They will get paid when you get paid. Be polite but firm. Waiting on payment is just part of the game, and it’s not your fault that they are late on their rent.
If you’re like me, you are in the early stages of your business. Maybe it’s not quite worth your while to go LLC or another type of business that is recognized as such by the government. In this case, get out your favorite pen, because you’re about to be writing lots of personal checks. Alternately, Paypal is your best friend, although this will charge your recipient a fee. Or you can always do cashier’s checks, which I don’t like very much because it’s essentially like sending cash in the mail. If you do go the personal check route, just be sure to remind your crew to cash their checks ASAP. What has happened to me before is a couple of guys that I sent checks to were out of town during that time. They finally got back to town and got around to depositing the checks, weeks after I had written them. Suddenly my checking account plummeted, long after I had forgotten I ever wrote those checks! Overdraft fees are a bitch.
Now, this is really important. Whichever form of payment you decide on, always get invoices from your crew. Imagine it’s tax season, and suddenly you get a big, fat W9 from the government for the sum total of your budget (which, since you’re not a business, was sent to your name by the client). Let’s say it’s for $10k. Well, as far as Uncle Sam is concerned, you owe him $10k worth of taxes. But in reality, you only saw, let’s say 30% of that as personal income. The rest went towards production expenses and paying crew. If this isn’t your first time around the block, you know that all those production expenses can be written off, and you don’t pay tax on them. So why should your crew be any different? What you do is you line item your crew payments as general expenses. Whether or not your gaffer is an honest man and declares the $600 he made is entirely between him and the IRS. You’ve done your job by keeping track of and reporting that expense, and as long as you have his invoice, it’s the same as having a receipt for craft services. Otherwise you’ll be paying tax on your crew’s behalf.
That’s pretty much all I’ve got for now. Again, this information is really for those producers in a similar position to my own: able to pay people, but not big enough where you’ve got a proper accounting system set up. So hopefully some of this is useful, and feel free to give a shout-out with how you prefer to do business. I’m always looking for ways to be doing things more efficiently!
Thanks for reading. Talk soon.