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An Important Guide to Running Payroll in the Events Industry

An Important Guide to Running Payroll in the Events Industry


Jun 03, 2024 Jesse Lizka

Picture this: you've just orchestrated a flawless event. The lights dazzled, the music soared, and the atmosphere crackled with energy. But behind the scenes, there's a mountain of payroll forms, spreadsheets, and payroll calculations awaits.  

Live events require the collaboration of diverse teams of professionals. From sound technicians to caterers, from promoters to ticket routers, it takes a small army to pull a live event off, and someone has to make sure they all get paid. This can be a painstaking procedure of legal procedures, forms, and managing spreadsheets.  

The good news is that with outsourcing and the right digital tools, you can create a streamlined, fail-proof payment system, and in this blog, you’ll learn how. 

This guide will break down every step of running payroll in the events industry so that you can ensure a smooth payment experience for all your events. 


Understanding the Fundamentals of Payroll
Payroll is the process of calculating and disbursing wages to employees. It encompasses various components, including basic wages, overtime, bonuses, and deductions for taxes and benefits.  

Accurate payroll processing is essential not only for ensuring employees are compensated fairly but also for compliance with labor laws and regulations. Without a proper system in place, you could leave your business liable to serious lawsuits. 

Payroll processing may not be glamorous, but it's undeniably crucial for keeping operations running smoothly in event planning. Whether you're organizing a local concert or a large-scale festival, understanding the fundamentals of payroll is essential.  

Here are some critical aspects to keep in mind:


Onboarding Documents
Smooth payroll starts with proper onboarding. Onboarding documents are the paperwork or forms that new employees complete when they join a company, providing essential information and agreeing to company policies and procedures. 

Check the relevant laws in the jurisdiction to ascertain which forms are required for taxes and compliance. Then, ask new employees to provide the necessary documentation, including tax forms, direct deposit information, and any relevant employment contracts. 

Gathering employee information during onboarding is a foundational step in the whole process. You should also create your own form where employees can add info like names, addresses, contact details, copies of their IDs, and, of course, banking information.


Wages
Wage miscalculations are the most common payroll error. Keeping accurate records of each employee's wages will save you a lot of headaches down the line. This includes hourly wages, salaries, and any additional compensation such as overtime pay or bonuses earned by employees involved in event planning, coordination, setup, execution, and cleanup.  

Implement comprehensive employee classification guidelines and wage calculation protocols to ensure consistency and accuracy across the organization. Regularly review and update wage structures to reflect changes in employment status or compensation policies. 

Also, different jurisdictions will have different legislation regarding things like payment for weekends, holidays, and overtime. This is important for event planning since many events occur during weekends or holidays.


Deductions and Taxes
Deductions and taxes play a significant role in payroll processing and have a dramatic effect on employee satisfaction. These may include contributions to social programs, retirement plans, income taxes, or something similar to Paylocity's cafeteria plans that allow employees to choose from a range of tax-deductible benefits.  

Navigating the intricacies of tax withholdings, benefit deductions, and retirement contributions requires meticulous attention to detail. That’s why it’s advisable to outsource or at least consult with financial advisors or benefit specialists. This can help design and administer benefit programs tailored to your business’s objectives and employee preferences.  

It’s also useful to know that most payroll software includes functionalities to automate deduction calculations and streamline benefits administration processes.


Record-Keeping
Stringent record-keeping is pivotal when it comes to payroll. Some countries require payroll record-keeping by law, but regardless, it's imperative to successful payroll processing.  

Documentation of employee wages, hours worked, tax withholdings, benefits deductions, and other relevant financial information are just a few of the things you’ll need to keep track of to ensure accurate and compliant payroll management. Accurate records are essential during tax season, in the event of a lawsuit, or if a payroll error occurs.  

For fail-proof record-keeping, it's best to rely on automated payroll software, that’s why the market for payroll software is expected to boom in coming years. Invest in specialized enterprise payroll software solutions tailored to the specific needs of your business. These systems are capable of huge scalability and automating administrative tasks.


Employee Classification
Employee classification refers to categorizing workers based on their employment status and the nature of their work within the event planning business. Properly classifying employees is crucial for compliance with labor laws and ensuring fair treatment.  

Employee classification is how you determine eligibility for benefits such as overtime pay, different types of leave, and insurance coverage.  

Take the time to understand the distinctions between full-time, part-time, and contract employees to avoid potential legal issues.


A Step-By-Step Guide to Running Payroll in the Events Industry
Any effective payroll process will be highly tailored to the individual needs of the business, event, and employees. The payroll system you establish must account for the number of employees, the size of the venue, and budgeting strategies. So, there’s certainly no one-size-fits-all option. That said, there are some key steps you don’t want to miss:


Gather Employee Information
First things first, gather all the necessary info about your team members.  

Create a standardized form or digital portal where employees can submit their details, including full name, address, social security number, and banking information for direct deposit. This ensures that you have all the necessary information to process payments accurately. But remember, privacy is key, so handle this information with care and ensure it's stored securely. 

A crucial step for new event management businesses is to incorporate your business to limit personal liability. It’s advisable to seek legal advice for this process, but to do so you’ll also need information on: 

  • Business name: A name that is not owned by any other business. 
  • Decision makers: Identify individuals responsible for making key business decisions. 
  • Business owners: Determine who owns the event management business. 
  • Business address: Provide the physical location of your business as well as the postal address for legal documents and correspondence if they are separate. 


Set Up Payroll Systems and Software
Now, let's talk tech! Investing in reliable payroll systems and software is instrumental in the payroll processes. You’ll find everything from payroll solutions for one-employee businesses to software suitable for the largest multinational corporation. So, this requires finding a solution that fits your needs and integrates well with your existing systems. 

Research and choose a solution that suits your business needs and budget. Seek features like automated calculations, direct deposit capabilities, and tax filing services to simplify your payroll administration as much as possible.  

Whether you opt for in-house software deployment or outsourcing to specialized payroll service providers will depend on the size of your team and level of expertise. If you opt for the former, though, you will have to prioritize training for you and your team to maximize the software's benefits.


Establish Payroll Schedules and Deadlines
Nobody likes waiting around for payday, so payroll schedules need to be sorted.  

Decide on pay periods, payment dates, and submission deadlines with precise timeframes, then communicate them clearly to your team. Clear communication and adherence to established payroll schedules and deadlines are essential in maintaining employee satisfaction and organizational efficiency. 

To ensure nothing slips through the cracks and everyone gets paid on time, create a shared calendar or send out regular reminders to keep everyone in the loop about payroll deadlines. This will help adjust payroll schedules to accommodate seasonal fluctuations or special events if necessary.  


Differentiate Employee Types and Calculate Wages
One size does not fit all when it comes to paying your team.  

Classifying employees correctly requires distinguishing between different kinds of employees, such as full-time, part-time, seasonal, or contract. If you’re unsure about proper classification, consult with legal or HR professionals. This will then inform how you calculate wages for each employee, factoring in things like hourly rates, overtime premiums, and incentive bonuses.  

This is where the right payroll software can make a world of difference. By automating calculations, you can save time and reduce errors. It’s also helpful when leveraging event analytics for future success.  


Address Special Situations
Flexibility and adaptability are essential qualities in managing payroll for an industry as unpredictable and dynamic as the live events industry.  

Anticipating and addressing special situations (temporary staffing requirements, event-specific compensation structures, variable work schedules, etc.) requires strategic planning and proactive communication. Develop contingency plans for handling unexpected events, then test these plans regularly to ensure readiness and effectiveness.


Conclusion
Whether planning a recruitment event, a sporting event, or a music festival, by following these steps, you can navigate the complexities of payroll processing in the events industry confidently and efficiently.  

Remember to stay informed about regulatory requirements, leverage technology to streamline processes, and prioritize communication and collaboration within your team. With the right approach, running payroll can become a seamless and rewarding aspect of event management. 

 

 

 

 

 


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