Accurately accounting for per diem expenses is crucial for maintaining a transparent and realistic film budget. It’s shown as a separate line item under the broader category of “Travel & Living Expenses” (or a similar title) and meticulously calculated based on the number of crew members, the length of the shoot, and the location’s standard per diem rates, ensuring accurate financial planning and compliance.
Understanding Per Diem in Film Production
Per diem, literally “per day,” is a daily allowance provided to film crew members to cover expenses related to meals, incidentals, and lodging (if not directly covered). It’s designed to reimburse employees for costs incurred while working away from their home base on location. Proper budgeting for per diem not only demonstrates financial responsibility but also helps attract and retain talent by ensuring their basic needs are met on set.
Why Accurate Per Diem Calculation Matters
Underestimating or improperly accounting for per diem can lead to several issues, including:
- Budget Overruns: Insufficient allocation leads to unexpected expenses that can derail a project.
- Crew Dissatisfaction: Inadequate per diem can negatively impact morale and productivity.
- Tax Implications: Incorrect documentation can raise red flags during audits.
- Legal Complications: Non-compliance with labor laws regarding compensation can result in legal issues.
The Structure of Your Per Diem Line in the Film Budget
The per diem section should be clear and easy to understand. Here’s a typical structure within the “Travel & Living” section:
- Line Item: “Per Diem” (or a more specific title like “Crew Per Diem – Location Shooting”)
- Detailed Breakdown: Beneath the main line, include columns for:
- Crew Position: (e.g., Director, DP, Gaffer, Grip, etc.)
- Number of Crew Members: How many individuals in that position are receiving per diem?
- Per Diem Rate: The daily allowance amount. This should be based on the location and the company’s policy (often aligned with federal government rates).
- Number of Days: The total number of days the crew member will receive per diem.
- Total Cost: Calculated as: (Number of Crew Members) x (Per Diem Rate) x (Number of Days).
- Subtotal: Sum of the “Total Cost” for each crew position.
- Notes: Include any relevant notes, such as the source of the per diem rate (e.g., “Based on GSA rates for Los Angeles, CA”).
Example:
| Crew Position | Number of Crew | Per Diem Rate | Number of Days | Total Cost |
|---|---|---|---|---|
| —————– | ——————- | —————– | —————— | ———— |
| Director | 1 | $200 | 15 | $3,000 |
| DP | 1 | $175 | 15 | $2,625 |
| Gaffer | 1 | $150 | 15 | $2,250 |
| Key Grip | 1 | $150 | 15 | $2,250 |
| Subtotal Per Diem | $10,125 |
Determining Per Diem Rates
Choosing the appropriate per diem rate is essential. Several resources can help:
- GSA Rates: The General Services Administration (GSA) publishes per diem rates for locations within the United States. These rates are often used as a benchmark, especially for lower-budget productions.
- Union Rates: Union contracts (e.g., IATSE, DGA, SAG-AFTRA) often stipulate minimum per diem rates for their members. Adhering to these rates is mandatory when working with unionized crew.
- Location-Specific Research: Investigate the cost of living in the specific filming location. Consider factors like average meal prices, transportation costs, and incidental expenses.
- Company Policy: If your production company has an established per diem policy, ensure it aligns with industry standards and legal requirements.
Common Mistakes to Avoid
- Using a Flat Rate for All Crew: Per diem rates can vary based on crew position, experience, and union agreements.
- Failing to Account for Travel Days: Travel days to and from location often require per diem.
- Not Factoring in Location-Specific Costs: Ignoring the cost of living in the filming location can lead to underestimation.
- Neglecting Documentation: Keeping detailed records of per diem payments is crucial for tax purposes.
- Confusing Per Diem with Salary: Per diem is intended to cover expenses, not supplement wages.
Frequently Asked Questions (FAQs)
Here are some frequently asked questions about showing per diem on a film budget:
FAQ 1: What happens if I underestimate the per diem costs in my budget?
Underestimating per diem can lead to significant budget overruns. You’ll either have to cut costs elsewhere, seek additional funding, or face unhappy crew members. It’s always better to overestimate slightly and have a buffer than to fall short. Regularly review and adjust your budget as needed.
FAQ 2: Can I offer a lower per diem rate than the GSA rate?
While you can offer a lower rate than the GSA rate, it’s generally not recommended, especially if you want to attract experienced crew. Offering significantly less can be perceived as unprofessional and can lead to dissatisfaction. If union contracts apply, you must meet or exceed their minimum per diem requirements.
FAQ 3: What are “incidentals” covered by per diem?
Incidentals generally include expenses like laundry, tips, and small personal care items. They are the miscellaneous daily costs associated with being away from home. However, personal entertainment costs are usually not included.
FAQ 4: How do I handle per diem for crew members who live near the filming location?
If a crew member lives close enough to commute to the filming location daily, they may not be eligible for per diem. This should be clarified in their contract. However, some productions offer a reduced per diem rate to cover meal costs even for local crew.
FAQ 5: Should I include per diem for pre-production and post-production?
Typically, per diem is only provided during principal photography when the crew is working away from their home base. Pre-production and post-production are usually handled within the crew’s regular salary or as a separate expense. However, if travel is required during these phases, per diem should be included.
FAQ 6: What documentation is required for per diem payments?
Maintain accurate records of all per diem payments, including the date, crew member’s name, location, per diem rate, and the total amount paid. It’s also advisable to have crew members sign receipts or acknowledgment forms confirming they received the per diem.
FAQ 7: How does per diem differ from a “travel allowance”?
A travel allowance usually covers transportation costs (flights, trains, rental cars), while per diem covers daily living expenses. They are distinct line items in the budget. Sometimes, a travel allowance might include a per diem component if it’s designed to cover meals during travel days.
FAQ 8: Is per diem taxable income for crew members?
In many jurisdictions, per diem is not considered taxable income as long as it’s within reasonable limits and properly documented. However, if the per diem rate is excessively high or not substantiated, it could be considered taxable income. Consult with a tax professional for specific guidance.
FAQ 9: What happens if a crew member’s actual expenses exceed the per diem rate?
Generally, crew members are responsible for managing their expenses within the allotted per diem. However, if unexpected circumstances arise (e.g., a medical emergency), some productions may offer additional assistance on a case-by-case basis.
FAQ 10: How do I account for per diem when filming in multiple locations?
Calculate the per diem separately for each location, using the appropriate rates for each area. Clearly specify the number of days spent in each location in your budget breakdown.
FAQ 11: Can I reduce per diem costs by providing meals on set?
Providing meals on set (craft services and catering) can significantly reduce per diem costs, especially the meal portion. Consider this option, but ensure the quality and quantity of food are adequate to avoid crew dissatisfaction. Adjust the per diem rate accordingly, specifying that it only covers incidentals and potentially lodging.
FAQ 12: What’s the best software for managing and tracking per diem expenses?
Several budgeting and accounting software options are available for film productions. Programs like Movie Magic Budgeting, Gorilla Budgeting, and Xero can help you track per diem expenses effectively. Using spreadsheet software like Microsoft Excel or Google Sheets is also a viable option, particularly for smaller productions. Choose a system that suits your budget and complexity of your project.