Film Accounting Glossary
Fringe rate
What is a fringe rate?
A fringe rate is the percentage applied to a category of wages to estimate the employer's total burden on top of them.
Different rates apply to different groups, because a union member with pension and health contributions carries a much heavier load than a non-union day player or a loan-out that only triggers limited taxes. Getting the rates and their caps right is one of the highest-leverage accuracy items in a budget.
Example
One show can carry four rates at once: roughly 20% on a non-union day player, 32% on a loan-out, 40%-plus on a union crew member with pension and health, and a different rate again on performers. Applying one blended rate to all of them guarantees the labor budget is wrong.
Figures are illustrative, chosen to show the mechanics rather than to quote market rates.
Where you'll see it
Set per labor category in the budget's fringe table, with the caps and wage bases that stop each component.
Common mistake
Applying one blended rate to every labor category. Union crew, loan-outs, non-union day players, and performers each carry very different loads and different caps.
Related questions
- Why does a production use more than one fringe rate?
- Because the components differ by category. A union member with pension and health contributions carries far more than a loan-out triggering only limited taxes.
- Do fringe rates apply to overtime?
- Largely yes. Per-hour components such as health and welfare accrue on every hour worked, so premium hours generate benefit cost as well as wage cost.