Camera assistants need talent marks, ditty bags, and camera carts. Makeup artists need brushes and spirit gum. Production assistants need Advil and thick skin.
Certain roles in film production sometimes come with their own set of tools needed to get the job done. And if you're a crew member bringing your own equipment, you might consider talking with the producer regarding a kit fee or an equipment rental.
So today, we’re talking about what kit fees are, how to assess what a fair price could be, and what makes kit fees taxable or non-taxable.
Let’s dive in.
In simple terms, a kit fee (also frequently referred to as a kit rental fee, box fee, or box rental fee) is a payment that a production company pays a crew member for the approved and authorized use of their own “kit,” which may include reusable equipment, and may include expendables (think single-use items such as tape, sash, gels, etc.).
The theory underlying the kit fee’s structure is that it should cover the normal wear and tear that a production inflicts on personally owned equipment, as well as the more straightforward usage of any resources maintained as part of a personal kit. This can sometimes include expendables, or single-use items --- like tape, a make-up sponge, or WD-40. This might even include a power drill used to help fix something on set.
A crew member should invoice kit fees either daily or weekly, and kit fees are often paid via your payroll.
However, it’s important to note that even though they’re generally paid within the same check, a kit fee is separate from wages. They are not the same thing, and they should not be treated the same way.
Purchases that are eligible for reimbursement are purchases crew has made on behalf of the production itself. If one buys tape, for instance, and is reimbursed for it, the production owns the tape.
Kit fees, on the other hand, cover purchases originally made by a crew member for that crew member, that the production may utilize, and then pay a kit fee for using it for the project’s purposes.
Kit fees are completely separate from a crew member’s wages (hourly or day rate).
Kit fees are often structured as flat fees, or, they can be based on a daily, weekly or project rate, depending on what's been negotiated. But keep in mind, this all depends on the needs of the production, you might not utilize your kit in the same way every single day.
Because a kit fee is separate from wages, it is not subject to overtime.
So, let's say a crew member works 16 hours on set, while that crew member would get more money, i.e. overtime, it does not mean they get a bigger kit fee. Again, kit fees are flat fees.
As mentioned, kit fees compensate the crew for the use of their equipment and material.
However, from a producer’s perspective, entering into a kit fee arrangement can also be beneficial for a production’s operation and budget as well.
If kit fees are designed to compensate crew members for use of their personal equipment, then we could also infer that kit fees are designed to grant a projects access to a wider range of equipment without having to rent or purchase each item.
In this way, kit fees simplify and streamline the material needs of professional filmmaking. But if you're a producer, this is only true if the kit fees are cost effective.
That said, it’s important to note that receiving a kit fee as part of one's paycheck is not the same thing as renting out gear to a production. Given the terminology, this may seem confusing, but it’s an important distinction, primarily for matters of production insurance, (specifically, liability).
When one receives a kit fee, that compensation is being paid directly to the crew member for the approved use of their kit.
In other words, even though the production is paying the freelancers for their gear, the individual owner who is using the equipment is the one responsible for it during the shoot, not the production.
When a production rents from a rental house, by contrast, the production accepts responsibility pursuant to the terms and conditions of the rental agreement, providing a certificate of insurance and, frequently, a deposit before any equipment is ever released by the vendor.
If a production is asking a crew member to include the use of a high-value item as part of a kit fee, it's best for that crew member to exercise caution. The safest bet is to handle it as an equipment rental, just like any rental made to a production. This makes the owner renting the equipment responsible to report that revenue on their taxes.
Start a paper trail, get a certificate of insurance, and create a contract.
Also, it’s important for a freelancer to calculate the costs associated with their resources to ensure that they're striking a deal that accounts for those costs.
Crew members bring their own equipment because they’re familiar with operating it. This takes away the learning curve required to adjust to new equipment.
Someone building a set may prefer to use their own drill since they understand all the settings, etc., or, a make-up artist may want to use their own kit because they already have their process based on their favorite brushes, etc.
This established familiarity could enable crew to move faster and more efficiently, potentially helping to streamline a shoot.
Can freelancer kit fees get taxed? The short answer is yes. However, they're not taxed the same as standard wages.
Kit fees are classified separately from wages, and any 1099-MISC or W2 that you receive at year’s end should reflect that. Unlike wages, income accrued from renting out personal property is not classified as “earned income.” Instead, a kit rental fee is classified as “passive income.”
According to the IRS, passive income is strictly defined as either “income from a business in which the taxpayer does not materially participate” or, more to our interests, “net rental income”. It’s a loose term over which there has been some argument even in professional circles, but it carries one massive detail important to our purposes.
Some payroll taxes, specifically those associated with FICA, do not apply to passive income. Given that FICA taxes are for Medicare and social security, this means that your passive income is also exempt from the self-employment tax.
An important side note to make here is that kit fees should not be confused with reimbursements for tax purposes.
As discussed earlier, reimbursements occur when a production pays a crew member to reimburse them for a business expense that said crew member first paid out of pocket.
So as a crew member, it's important to know that because reimbursements relate to the production’s business expenses, they are not taxable.
The question of whether a kit fee’s structure makes it taxable is certainly common, but it’s not the only relevant point to discuss. Another significant impact that kit fees may have on taxes is in how they relate to a freelancer's annual business expenses.
The money a crew member pays for the equipment and the supplies in their kit, should all count as tax deductible business expenses. Therefore, if a freelancer is deriving the price of kit fees according to the depreciation of those items over time, in theory, the expenses related to their kit should directly off-set any income that they're earning for kit fees in a given year, bringing their taxable income from kit fees down to zero.
Of course, the practical necessities of building kits and charging kit fees often prevent the equation from working out perfectly, but the ratio is worth keeping in mind as tax season approaches.
It’s also worth noting that there are multiple options for exactly how one deducts business expenses from taxable income from year to year, particularly when it comes to more expensive items whose value depreciates over much longer periods of time.
Always seek the advice of a tax professional before making any major decisions about how to approach taxes.
If you ask around in your professional circles or nose around the internet long enough, you’ll likely discover that there are many, many different methods by which people determine what to charge for a kit fee.
Some professionals carefully divide the value of their kit by a percentage of wear and tear that they believe a given production represents.
Some keep a detailed, item-by-item price inventory. Others just go by what they consider “normal” among their peers, and at least a few simply wait to see what the production department offers them.
The truth is that the value of kit fees is highly variable, depending on the items in the crew member’s kit and also on the size, budget, and duration of the production itself.
The only commonality is that kit fees must often be negotiated between the production and freelancer.
With that in mind, let’s run down some of the broad strokes of what one might expect kits and kit fees to look like from various departments.
Camera assistant kit fees are some of the most encountered in the industry.
1st AC kit fees and 2nd AC kit fees are great examples of why kit fees are necessary. The tools inside their kits may be minor as individual items, but they’re fundamental to basic set operations.
Camera marks, lens cleaner, laser measures, dry erase markers, and much more are all part of a typical camera department kit.
2nd AC kit fees are virtually non-existent on low budget productions, but it never hurts for the freelancer and the production company to discuss the possibility.
On higher budget productions, it’s generally advisable to coordinate with the rest of the camera department. While rates will range, again, it definitely doesn't hurt to discuss with the production company ahead of time, especially if providing larger items like the cart to a camera kit rental.
Ultimately, the DP, the head of the department, will likely give the best advice regarding what's appropriate to bring and what a realistic kit fee would be depending on the production's budget.
The art department is perhaps the most variable department in terms of kit fees.
Expendable resources can and often should be purchased directly by the production within their budget or the art department’s. For instance, things like tools to build sets, or paint supplies, might make more sense being paid with petty cash, rather than a kit fee.
However, there are instances when a kit fee might be appropriate. If there are scenes that require a variety of design elements---including fabric changes, or other materials the crew member has in their repertoire, helping them move faster and streamline the department's process, a kit fee could make more sense. Again, a conversation between the department and the producer(s) is key.
Kit fees within the wardrobe department can be tricky in that it can either cover a mountain of gear (racks, irons, steamers, sewing supplies, etc.) or a very small kit of essential tools.
Often, the production might include the costumes within their own budget. On larger productions, they might be making their own costumes, or in other instances, PA's or wardrobe assistants might be going out to purchase these costumes and getting reimbursed or paying with petty cash.
However, kit fees can come into play with regard to the supplies needed to make those costumes. For instance, thread, needle, maybe even a sewing machine, could all be included in a kit.
Again, a lot of this will vary based on production size, type, and what makes the most financial sense. A conversation between the producer and those in Wardrobe should be had way before cameras roll.
By and large, hair and make-up are the most common kit fees. Hair and make-up kit fees enable the artists to keep a versatile stock of beauty supplies on hand at all times, not to mention allowing them to use tools they're familiar with.
Many of these products will not be used on your production, but that’s not the point. When your lead actor shows up to set with a black eye in the middle of a shooting week, you have no idea how happy you’ll be to have a competent make-up artist waiting in the wings with exactly the right product. Hair and make-up kit fees should be carefully negotiated with production, and supplies should be monitored over the course of a given shoot.
Modern beauty products can be costly, and the hair and make-up kit fees that help pay for them should not be underestimated.
Electric and grip kit fees tend to be paid for specialized items and are, thus, wildly variable. On low budget productions, it’s relatively rare that these kit fees are paid at all.
However, when a production of any size requires specialized rigging equipment, they often source it directly from members of the grip team, resulting in kit fees. Grip kit fees are often paid for items like harnesses and pulley systems; items that are frequently needed, but not so much that they’re likely to appear on a standard rental list.
Kit fees paid to members of the sound department are often the closest that kit fees come to a standard equipment rental. Sound recordists generally prefer the familiarity and versatility of their own kits and will often rent it out under the price of their kit fee at heavily discounted prices, in order to encourage production to rent directly from them.
For price comparisons, it’s best to check out the rental prices of specific or similar pieces of equipment at your local rental houses.
Finally, members of the production department generally have a straightforward experience of kit fees in the filmmaking industry.
Sometimes a producer will pay for the use of a laptop or cell phone, but that is on a case-by-case basis. And on lower budgeted productions, it’s a pretty safe bet that crew won’t receive a kit fee, though, as always, it never hurts to ask.
Kit fees are part of the filmmaking ecosystem.
There’s no easy, one-size-fits-all answer for what one should ask for, or offer. So whether you're a producer or a crew member, don’t be afraid to ask questions and compare rates.
At the end of the day, the supplies in each department's kit are resources needed to get the job done, but only if it makes sense to the production as a whole.
For more insight on insuring equipment, take a look at our Producer's Guide to Film Equipment Insurance.
At Wrapbook, we pride ourselves on providing outstanding free resources to producers and their crews, but this post is for informational purposes only as of the date above. The content on our website is not intended to provide and should not be relied on for legal, accounting, or tax advice. You should consult with your own legal, accounting, or tax advisors to determine how this general information may apply to your specific circumstances.