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6 Tips on Running Payroll for Live Events

Jun 16, 2021 9:50:12 AM Thomas Davey
6 Tips on Running Payroll for Live Events

Live events, meetings, and shows have one thing in common: everyone at the event has to get paid. That means the event coordinator, the executive, and everyone else who makes your live event get past the planning stages needs a reliable way to earn a paycheck. 

To accomplish this, you’ll need to incorporate your business, create a budget, use the appropriate employee forms, get onboarding information, and set up a payment schedule.

1. Incorporate Your Business

When a business incorporates, the general partnership sole proprietorship becomes a company formally recognized by your state of incorporation. Incorporated companies are their own legal business structure that sets them apart from the individuals who found the business.

Advantages vs. Disadvantages

Before you start planning your live event or commence event planning, you should incorporate your business to limit your personal liability. Since you may be managing multiple contractors, employees, clients, and vendors, you may want to distance yourself, so you aren’t responsible for them if they’re injured on the job. 

However, dissolving from a corporation and setting up a new one comes at a cost, additional recordkeeping, and annual reporting requirements. Depending on the size of your live event, that may not seem like a disadvantage, as a corporation saves you money on taxes. 

Paperwork for Incorporation 

If you decide to incorporate your business, consider the following:

  • Business Name: Incorporated businesses must select a name that hasn’t been taken by another corporation or company in the state their business resides. After your name, you must end it with an abbreviated or full spelling for company, incorporated, or corporation.
  • Decision Makers: When incorporating a business, the owner must list the incorporator or the person managing the paperwork. Then, list the directors who determine the goals of the company. A director can be the business owner.
  • Business Owners: When a business incorporates, the employees of that business become shareholders. The amount of shares you have in your company typically derives from the business valuation, investor interest, and employee stock ownership.
  • Business Address: Consider a PO Box to maintain privacy and increase security.
  • Physical address: Another address is needed to record where legal documents need to be sent if necessary. The second address must be in the same state as the first.

Congratulations! Your business is now incorporated.

2. Choose Whether You’ll Use an Event Payroll Vendor

As a business owner, you wear many hats, but if you’re not confident enough to try out live event planning for yourself, you can hire someone else to do it for you. If the intricacies of wage payment laws are beyond your expertise, a full-service contract employee is what you need.

What are the benefits of hiring an Event Payroll Vendor?

Most business owners have some knowledge of how payroll works, but that doesn’t mean they’ll be able to take on the responsibility of paying their staff and pulling off a great event. It’s also taxing to do everything yourself. As the person putting on this event, you need to concentrate on the event itself, so you may want to consider handing off payroll duties to someone else.

3. Create a Budget

A budget is necessary for all aspects of business, but for live events, appropriate spending is essential. Since live events are time-focused, you may buy items that could have been avoided with proper planning. Live events have many moving parts, so let’s look at a few.

What are your key expenses?

Live events may need a venue, marketing materials to promote the event, and a business office. These expenses are operating expenses, but that only covers the cost before the show. You would need to think about catering, equipment rentals, and much more for the live event. You also need to consider the payroll expense for contractors and employees.

What are your total payroll expenses?

Contractors and employees can’t just be paid with a cheque. Employers have to calculate the cost of running payroll in holiday pay, benefits, overtime, workers comp, and unemployment. 

The employer pays a percentage of these payroll expenses—research your state for payroll necessities, including insurance. You’ll likely pay 17-50% for payroll.

Do you have a budget for mistakes?

No one wants to make a mistake in the budget because it implies that you’ve lost money somewhere from your own error. However, it’s vital that you prepare for mistakes, or you’ll be paying your employees out-of-pocket. To avoid IRS penalties, keep a safety net off to the side if you misclassify contractors and employers, file in the wrong state, or incorrectly payout over time.

Do I have financial tools that can help me?

Use a budget calculator to accurately determine what your labor costs are before starting the live event. In addition, if your business has other up-to-date software options, like expense tracking or accounting software, you could save your business thousands from payroll errors.

4. Understanding Employee and Contractor Payroll

Do you know the difference between a contractor and an employee? If you don’t, it’s required you read up on the laws in your state, or the IRS will find you and/or send you to prison. 

Yes, it’s that serious. A mistake is still a crime, so consider the following when hiring:

What are your federal and state labor laws?

It’s common for businesses to hire regular employees as contractors because they pay less in taxes, but it’s not worth it. If an employee complains, you’ll be found liable for that mistake, whether it was intentional or not. Before making sweeping decisions on who is or isn’t a contractor, consult your federal and state labor laws to classify employees appropriately.

Your employees may be in a different state at the time of the event, and you'll need to calculate the cost associated with out-of-state payroll. Each state has its own labor laws, so never complete payroll until you’re positive you’re following the rules.

Can I hire local talent?

Hiring local talent will help you save money because you won’t have to fly them out from a few states over. If you’re paying for a coordinator's travel fees from across the United States, that could quadruple what you pay for live talent in the room, board, food, and other necessities. In addition, local speakers will usually offer their skills at a lower price or with incentives.

Hiring locally also helps you navigate legalities associated with traveling employees. You really don’t want to be handling payroll for employees from different states as it ups your costs.

Are the new hires union members?

Whether the people you hire are a part of the staff or the talent, you have to pay close attention to these employees after hiring them because payroll taxes for union members are different. Union members are typically paid more than non-unionized employees, and they have set rules on hours, residual pay, overtime, working conditions, breaks, and more.

Union members are often more experienced and proficient, which can help your live event become successful. So, in a sense, that added headache at payroll may be worth it.

What are the key differences between contractors and employees?

As a rule, contractors are employees that work for someone else or themselves, whereas an employee works directly under you. Therefore, contractors are self-employed, and the money they make working as contractors is subject to self-employment tax. Independent contractors must submit invoices to receive payment, and they’ll use their own tools to complete a job.

Employees perform services on behalf of a company and are controlled by an employer. The employee has a legal right to control how a service is performed. As a rule, an employee can’t be subject to self-employment tax as their employer oversees their tasks. Although an employee can fill out a timesheet, usually, they’ll receive payment via a paycheck. 

5. Gather All Necessary Onboarding Documents

The employees and contractors you hired will need onboarding documents to start working for you. At this point, you should be able to classify your employees correctly because once they sign their onboarding documents, you’re responsible for their taxes and payroll.

Most live events will have 3-5 forms. The most common are W-2’s, W-4’s, and I-9’s.

Form W-2: For Employees 

Most of your employees will be in-house speakers, so you may have already issued the W-2 form to your staff. As an employee form, workers that use a W-2 work for you and complete tasks based on your preferences. 

Form 1099: For Independent Contractors

To fill space, live event staff may hire an independent contractor. Hiring a contractor can make it easier for your team to get straight to work because they’re typically well-trained and knowledgeable on live events. If you keep them on staff, they’ll graduate to a W-9.

Form W-9: For Seasonal Labor

Live events will typically hire staff for a season or per event, which means the contractor falls into the W-9 form category. Contractors will use a W-9, while employees will use another. This document requires a taxpayer identification number and certification. All contractors must complete this document before payroll can process their payment.

Form W-4: For Tax Purposes

All employees and contractors will receive a W-4, so the employer knows how much in taxes they need to take off each paycheck. 

Form I-9: To Verify Employee/Contractor Identity

The I-9 must be completed by all employees, whether they’re non-citizens or U.S. citizens. This form verifies that the person you’re employing is who they say they are.

Other Documents

Employers may need to submit other paperwork, like an employment agreement or a background check.

6. Establish a Payment Schedule

An employer must determine the payment schedule for their hires that aligns with federal and state labor laws. Therefore, the frequency of payment cannot be determined by your own preference unless it fits the rules and regulations of your state. The situations for pay periods and employment duration are also determined by the size and scope of your company.

Determine Pay Periods

Pay periods are standard for most employees. Your workers will typically expect a bi-monthly pay period, meaning they’ll be paid every two weeks, or the pay period will fall on the 1st and 15th of each month. Seasonal or temporary contracts may need to be paid once a week.

Determine Employment Duration

Employers can offer a single payment option for contractors who stay with your company for less than two weeks. Contractors that stay longer may need to be paid similarly to a regular employee by scheduling a pay period. Ensure your contractors are aware of this switch.

Conclusion

Preparing for a live event can be taxing, especially if you’re administering payroll. However, with these six tips, you can plan an event from start to finish and not get bogged up on miscategorizing employees and paying them the wrong salary.

The Author

Jess Perkins

Jessica Perkins is a writer and SaaS marketing consultant who helps businesses scale up their marketing efforts. She is obsessed with learning and also is passionate about sculpting.

Topics: Event Management

Thomas Davey

Written by Thomas Davey

Copywriter and marketing specialist who enjoys showing the world what can be done with the power of events and some good technology.

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