Film Accounting Glossary
Imputed income
What is imputed income?
Also called taxable benefit, or non-cash compensation.
Imputed income is the value of a non-cash benefit that has to be treated as taxable wages, such as personal use of a production vehicle, certain travel for a companion, or gifts above a de minimis threshold.
It generates withholding and employer tax cost even though no cash was paid to the recipient. Productions catch it at year end when the payroll company adds it to a W-2, which is the wrong time to discover it.
Example
A producer's assigned vehicle is used personally at weekends across a 20-week shoot. The personal-use value is taxable wages, so it generates withholding and employer tax the show never budgeted, and it surfaces when the payroll company adds it to a W-2 in January.
Figures are illustrative, chosen to show the mechanics rather than to quote market rates.
Where you'll see it
Caught at year end if nobody flags it earlier, which is the wrong time. Belongs in the conversation when vehicles or companion travel are assigned.
Common mistake
Discovering it at year end when the payroll company adds it to a W-2. By then the withholding and employer tax were never budgeted and the crew member is surprised.
Related questions
- What creates imputed income on a production?
- Non-cash benefits treated as wages: personal use of a production vehicle, certain companion travel, and gifts above a de minimis threshold.
- Who pays tax on imputed income?
- The recipient, through withholding on the imputed value, and the employer, through its share of payroll taxes on the same amount.