Film Crew Deal Memo: What It Is and How to Write One (2026)
Feb 22, 2026
A film crew deal memo is the agreement between a production company and a crew member that documents the terms of their hire: rate, role, start date, credit, and working conditions. It is typically one to two pages long, signed before or on the first day of work, and serves as the binding document governing the relationship for the duration of the engagement.
Deal memos are the operational backbone of production hiring. They move fast, they have to be accurate, and the mistakes productions make with them create expensive problems later. This guide covers what goes into a deal memo, how union and non-union memos differ, how deal memos connect to payroll and budget tracking, and the mistakes that cause real damage.
What Is a Film Crew Deal Memo?
A deal memo is a short-form agreement that captures the key terms of a crew hire in a format that can be generated, signed, and returned in hours rather than weeks. It is not a full contract, but it is legally binding from the moment both parties sign it.
The name comes from the idea of a "memorandum of deal terms", a summary of the essential points agreed to, with the understanding that a longer-form agreement may follow for senior hires. For most below-the-line crew on independent productions, the deal memo is the only document ever signed. For directors, showrunners, and key creative talent, it precedes a full long-form agreement negotiated by attorneys.
Productions use deal memos because the alternative is chaos. Without a signed document, disputes arise over what rate was agreed to, whether the hire was for five or eight days, who owns the footage shot on the crew member's personal camera, and what credit they are owed. The deal memo eliminates these disputes by creating a shared written record before work begins.
Deal Memo vs. Full Contract: What Is the Difference?
Factor | Deal Memo | Full Contract |
|---|---|---|
Length | 1 to 2 pages | 5 to 30+ pages |
Purpose | Confirms key terms so work can begin immediately | Documents every obligation, right, and remedy in detail |
Timeline | Signed on or before day one of production | Negotiated weeks or months ahead; requires attorney review |
Legal weight | Legally binding but leaves gaps | Fully enforceable with no ambiguity |
Who drafts it | Production coordinator, UPM, or line producer using a template | Entertainment attorney |
Risk | Binding on the agreed terms; silent on everything else | Stronger enforcement; remedies are defined |
The critical legal point is that a deal memo is legally binding from the moment it is signed. The danger is not enforceability, it is that the memo is silent on issues a full contract would address, leaving gaps that courts fill unpredictably. A production relying only on deal memos for VFX supervisors, composers, or other crew with complex IP contributions creates real exposure around ownership, credit, and residuals.
For day players and most below-the-line crew on indie productions, the deal memo is sufficient. For the director, key above-the-line talent, and any hire that involves original creative contributions beyond pure service work, a full long-form agreement should follow the deal memo.
What Every Film Crew Deal Memo Must Include
A production-ready deal memo needs these sections. Omitting any of them creates disputes.
Identity and Project Information
Production company legal name and contact information
Project title and format (feature film, short, commercial, music video, episodic TV)
Crew member's full legal name, address, phone, and email
Social Security Number or EIN, required for tax reporting and payroll processing
Start date and anticipated wrap date or guaranteed number of days
Job title exactly as it will appear on the call sheet and in payroll records
Compensation
Day rate, weekly rate, or flat fee stated as a gross amount before taxes
Guaranteed minimum: the number of days or weeks the production guarantees, regardless of whether shooting runs short
Box rental / kit rental: a separate daily or weekly rate for crew members who bring their own equipment (DPs, sound mixers, gaffers, costume designers). This is distinct from the labor rate and must be stated as a separate line.
Overtime rate: typically 1.5x after 8 hours, 2x after 12 hours. California labor law sets these minimums regardless of what the memo says or whether the crew member is union. State law controls.
Meal penalty: a flat fee triggered if a meal break is not provided within 6 hours of call time
Per diem: daily allowance for food and incidental expenses on location shoots
Car allowance or mileage reimbursement if the crew member is using their own vehicle
Screen Credit
Credit title, stated exactly (e.g., "Director of Photography" not "DP" or "Cinematographer")
Card type: single card, shared card, or end roll
Placement: main titles, end titles, or "in accordance with guild agreement" for union hires
Leaving credit terms vague ("credit to be determined") on a deal memo is a common mistake that creates disputes. Crew members who declined other work based on receiving a certain credit have grounds for a claim if the production changes terms after the fact.
Work Terms
Standard workday length (8, 10, or 12 hours)
Meal break provisions and timing
Travel terms: who pays for travel, class of travel for flights, hotel standard
Location information if the work requires travel away from the crew member's home market
Rights and Releases
Work-for-hire clause: all work product created in the course of the engagement belongs to the production company. This is not automatic, it must be stated explicitly.
Image and likeness release: permission to use behind-the-scenes footage, press photos, and trailer content featuring the crew member
Confidentiality: prohibition on disclosing story details, financial terms, or production information
No obligation to produce: the production reserves the right to not release the finished work without creating liability
Payment Terms and Kill Fee
Payment schedule: weekly, bi-weekly, upon wrap, or by invoice
Payment method: check, ACH direct deposit, or via payroll company
Kill fee: payment owed if the production cancels the engagement after the crew member has been hired. Standard range is 10% to 25% of the total deal value. Without a kill fee clause, a crew member who declined competing work based on this commitment has no recourse when the production cancels.
Expense reimbursement terms and receipt requirements
Worker Classification
The memo should explicitly state whether the hire is a W-2 employment engagement (routed through a payroll company) or a 1099 independent contractor arrangement. Getting this wrong exposes the production to significant tax liability. See the section below on W-2 vs. 1099 for detail.
Exclusivity
Whether the hire is exclusive (the crew member cannot take other work during the engagement) or non-exclusive
"First call" language if exclusivity is too restrictive for the budget
Governing Law and Signatures
The state whose law governs any dispute
Dispute resolution mechanism (arbitration clause or litigation)
Signatures of both parties with dates
Union vs. Non-Union Deal Memos
Non-Union Productions
Non-union productions use their own templates with no prescribed form. Rates are negotiated freely with no minimums beyond state labor law requirements. California law requires 1.5x overtime after 8 hours and 2x after 12 hours regardless of union status, so non-union California productions cannot contract around those requirements even if the crew member agrees to flat-rate arrangements.
SAG-AFTRA (Performers)
SAG-AFTRA signatory productions must use specific performer deal forms, called Start Papers, for each engagement. Rates cannot fall below the applicable agreement minimums (Ultra Low Budget: up to $250,000 budget; Modified Low Budget: up to $700,000; Low Budget: up to $2.5 million; Standard Agreement for larger productions). The production must also remit pension and health contributions (currently 21.5% employer contribution) to the SAG-AFTRA Health Plan. Taft-Hartley forms are used when a production hires a non-union performer, which triggers a 30-day window for the performer to join the union.
IATSE (Below-the-Line Craft Crew)
IATSE covers camera (Local 600), sound (Local 695), props (Local 44), grip/electric, costume, makeup, and other craft departments through a network of local agreements. Deal memos for IATSE members must reference the applicable local agreement and include the correct minimums, box rental rates per the CBA, overtime structure (1.5x after 8 hours, 2x after 12), and meal penalty language. Productions must remit health and pension contributions as required by the local.
DGA (Director, First/Second AD, UPM)
DGA agreements cover directors, first and second assistant directors, and unit production managers on signatory productions. DGA deal memos must include guaranteed preparation days, editing days for directors, and minimum rates from the DGA Basic Agreement or appropriate supplemental agreement. DGA minimum turnaround is 10 hours between wrap and call, shorter than the 12-hour standard under IATSE and SAG-AFTRA.
Deal Memos, Payroll, and Budget Tracking
The deal memo is not just a legal document, it is the source data for two critical production finance functions: payroll processing and budget tracking.
Deal Memo to Payroll
Every crew member's deal memo rate becomes a budget line item and a payroll input. For W-2 employees, the deal memo feeds the payroll company's onboarding system: the crew member's rate, classification, and start date go into the payroll system, and the payroll company handles tax withholding, union contributions, and year-end W-2 issuance. The production pays the payroll company the gross rate plus employer-side taxes and fringe contributions.
For independent contractors (true 1099 workers, vendors, consultants, freelancers who control their own work), the deal memo or service agreement feeds the contractor payment process. Saturation Pay handles contractor and vendor payments in this category: payments are processed directly through the platform and logged automatically against the relevant budget line. This is not payroll, it is contractor payment processing for workers who are legitimately classified as independent contractors.
The most expensive deal memo mistake a production can make is misclassifying W-2 employees as 1099 contractors to avoid the overhead of a payroll company. On-set crew who are directed, supervised, and provided equipment by the production are employees under both IRS guidelines and California's ABC Test. Incorrect 1099 classification exposes the production to back taxes, penalties, and wage claims that can easily exceed the cost of running proper payroll.
Deal Memo to Budget
Every deal memo rate needs to be reflected in the production budget before hiring begins. A line producer who agrees to day rates without verifying they fit within the approved budget creates overages before the first shooting day. The budget should be built from deal memo terms, not the other way around.
Real-time budget tracking against actual deal memo commitments is where cloud-based production finance tools add clear value over desktop spreadsheets. When deal memo rates for all department heads are entered into the budget system, the line producer can see immediately how committed labor costs compare to the budget across every department. For a walkthrough of how production budgets are built from deal memo inputs, see the guide to how to create a film budget.
On productions where the line producer manages both hiring and expense tracking, fringe calculations on deal memo rates are particularly important: the crew member's negotiated rate is just the starting point, and employer-side taxes, pension and health contributions, and workers compensation add 20% to 35% to the actual cost of each hire depending on union agreements and state. Missing fringe in the budget is one of the most common causes of labor cost overruns. For more on how production expense tracking and cost reporting work across the shoot, see the guide to managing film production expenses.
Common Deal Memo Mistakes
Not Signing Before Work Begins
The most common and most dangerous mistake. Production gets busy, the deal memo circulates after the shoot, crew members have different memories of what was agreed to, and now there is a dispute over a rate that was never documented. Sign before day one, without exception.
Vague Overtime Language
Writing "standard overtime" without specifying the rate and trigger creates disputes. "After 10 hours, 1.5x" and "after 8 hours, 1.5x, after 12 hours, 2x" are materially different numbers over a 15-day shoot. State the exact structure in the memo.
Missing Kit Rental as a Separate Line
Many crew members (DPs, sound mixers, gaffers, costume designers) bring their own equipment and expect kit rental on top of their day rate. If the memo does not specify the kit rental amount, the crew member invoices a number the production disputes. Confirm the rate on the memo and confirm whether it is taxable or reimbursable.
No Kill Fee
Independent productions cancel or postpone frequently. Without a kill fee clause, a crew member who turned down other work based on this commitment has no recourse when the production is delayed. A 10% to 25% kill fee clause is standard professional practice and costs nothing to include upfront.
Worker Misclassification
Using a deal memo to engage an on-set crew member as a 1099 contractor when they should be a W-2 employee is not just a tax issue, it is a wage and labor law issue. California's DLSE and the IRS both conduct classification audits of productions. The penalties, including back employer taxes, interest, and potential wage claim liability, routinely exceed the cost of running proper payroll from the start.
Generic Templates Without Legal Review
Templates downloaded from the internet may be missing state-specific provisions, union-required language, or current work-for-hire clause standards. A one-time entertainment attorney review of your production company's standard deal memo template costs a few hundred dollars and protects you on every production that follows.
The Line Producer's Role in Deal Memos
On most productions, the line producer or UPM manages the deal memo process: generating memos from the template, negotiating rates with department heads, routing them for signature, and ensuring all signed memos are collected before shooting begins. The production coordinator typically handles logistics, sending, tracking, filing, but the line producer owns the terms.
Keeping deal memo rates consistent with the approved budget is the line producer's responsibility before a single memo goes out. Rate creep, where department heads negotiate rates higher than budgeted without the line producer catching it, is a frequent source of below-the-line overruns. For a full breakdown of the line producer's responsibilities across all phases of production, see the guide to what a line producer does.
Frequently Asked Questions
What is a deal memo in film?
A deal memo is a short-form agreement (typically 1 to 2 pages) between a production company and a crew member that documents the terms of their hire: rate, role, start date, credit, overtime provisions, and payment terms. It is legally binding from the moment both parties sign and serves as the governing document for most below-the-line crew engagements on independent productions.
Is a deal memo legally binding?
Yes. A signed deal memo is a legally binding contract. The limitation is that it does not address every possible issue, a full long-form agreement would cover IP ownership, indemnification, and credit arbitration in more detail. But the terms documented in the deal memo are enforceable from the moment it is signed.
What is the difference between a deal memo and a contract?
A deal memo is a brief summary of key hire terms, usually generated from a template and signed quickly so work can begin. A full contract is a detailed legal document negotiated by attorneys that addresses every obligation, right, and remedy. For most crew members on independent productions, the deal memo is the only document needed. For directors, showrunners, and key creative talent, a full contract follows the deal memo.
When should a deal memo be signed?
Before the crew member's first day of work, without exception. Signing after work has begun creates disputes about what was agreed to and can affect worker classification. Many productions send deal memos during pre-production, well before shooting starts, to lock in rates and terms across all departments.
What is a kit rental on a deal memo?
Kit rental (also called box rental) is a separate daily or weekly fee paid to a crew member who brings their own equipment to the production. DPs, sound mixers, gaffers, costume designers, and makeup artists commonly negotiate kit rental on top of their day rate. The kit rental amount should be listed as a separate line item on the deal memo and accounted for separately in the production budget.
Do deal memos apply to union crew?
Yes, but union deal memos must reference the applicable collective bargaining agreement and reflect at minimum the required rates, fringe contributions, and working conditions. SAG-AFTRA requires its own Start Paper forms for performers. IATSE deal memos must reference the applicable local agreement. DGA deal memos must include guaranteed prep days and the applicable minimum. Non-union productions can use any template, but state labor law requirements (overtime, meal periods) still apply.
Can I use a deal memo for independent contractors?
A deal memo or service agreement can be used for independent contractors, but the worker must actually qualify as an independent contractor under IRS guidelines and the applicable state's ABC Test. On-set crew who are directed, supervised, and provided equipment by the production are employees, not contractors. Using a deal memo to misclassify employees as contractors creates tax, wage, and labor law liability. Genuine contractors, vendors, consultants, post-production vendors, can be engaged with a deal memo or service agreement and paid through contractor payment platforms like Saturation Pay.
What is a kill fee on a deal memo?
A kill fee is the payment owed to a crew member if the production cancels the engagement after they have been hired. It compensates the crew member for declining other work based on this commitment. Standard kill fees range from 10% to 25% of the total deal value. Without a kill fee clause, a crew member has no contractual recourse when a production is postponed or cancelled.
By Jens Jacob, film producer and co-founder of Saturation
A film crew deal memo is the agreement between a production company and a crew member that documents the terms of their hire: rate, role, start date, credit, and working conditions. It is typically one to two pages long, signed before or on the first day of work, and serves as the binding document governing the relationship for the duration of the engagement.
Deal memos are the operational backbone of production hiring. They move fast, they have to be accurate, and the mistakes productions make with them create expensive problems later. This guide covers what goes into a deal memo, how union and non-union memos differ, how deal memos connect to payroll and budget tracking, and the mistakes that cause real damage.
What Is a Film Crew Deal Memo?
A deal memo is a short-form agreement that captures the key terms of a crew hire in a format that can be generated, signed, and returned in hours rather than weeks. It is not a full contract, but it is legally binding from the moment both parties sign it.
The name comes from the idea of a "memorandum of deal terms", a summary of the essential points agreed to, with the understanding that a longer-form agreement may follow for senior hires. For most below-the-line crew on independent productions, the deal memo is the only document ever signed. For directors, showrunners, and key creative talent, it precedes a full long-form agreement negotiated by attorneys.
Productions use deal memos because the alternative is chaos. Without a signed document, disputes arise over what rate was agreed to, whether the hire was for five or eight days, who owns the footage shot on the crew member's personal camera, and what credit they are owed. The deal memo eliminates these disputes by creating a shared written record before work begins.
Deal Memo vs. Full Contract: What Is the Difference?
Factor | Deal Memo | Full Contract |
|---|---|---|
Length | 1 to 2 pages | 5 to 30+ pages |
Purpose | Confirms key terms so work can begin immediately | Documents every obligation, right, and remedy in detail |
Timeline | Signed on or before day one of production | Negotiated weeks or months ahead; requires attorney review |
Legal weight | Legally binding but leaves gaps | Fully enforceable with no ambiguity |
Who drafts it | Production coordinator, UPM, or line producer using a template | Entertainment attorney |
Risk | Binding on the agreed terms; silent on everything else | Stronger enforcement; remedies are defined |
The critical legal point is that a deal memo is legally binding from the moment it is signed. The danger is not enforceability, it is that the memo is silent on issues a full contract would address, leaving gaps that courts fill unpredictably. A production relying only on deal memos for VFX supervisors, composers, or other crew with complex IP contributions creates real exposure around ownership, credit, and residuals.
For day players and most below-the-line crew on indie productions, the deal memo is sufficient. For the director, key above-the-line talent, and any hire that involves original creative contributions beyond pure service work, a full long-form agreement should follow the deal memo.
What Every Film Crew Deal Memo Must Include
A production-ready deal memo needs these sections. Omitting any of them creates disputes.
Identity and Project Information
Production company legal name and contact information
Project title and format (feature film, short, commercial, music video, episodic TV)
Crew member's full legal name, address, phone, and email
Social Security Number or EIN, required for tax reporting and payroll processing
Start date and anticipated wrap date or guaranteed number of days
Job title exactly as it will appear on the call sheet and in payroll records
Compensation
Day rate, weekly rate, or flat fee stated as a gross amount before taxes
Guaranteed minimum: the number of days or weeks the production guarantees, regardless of whether shooting runs short
Box rental / kit rental: a separate daily or weekly rate for crew members who bring their own equipment (DPs, sound mixers, gaffers, costume designers). This is distinct from the labor rate and must be stated as a separate line.
Overtime rate: typically 1.5x after 8 hours, 2x after 12 hours. California labor law sets these minimums regardless of what the memo says or whether the crew member is union. State law controls.
Meal penalty: a flat fee triggered if a meal break is not provided within 6 hours of call time
Per diem: daily allowance for food and incidental expenses on location shoots
Car allowance or mileage reimbursement if the crew member is using their own vehicle
Screen Credit
Credit title, stated exactly (e.g., "Director of Photography" not "DP" or "Cinematographer")
Card type: single card, shared card, or end roll
Placement: main titles, end titles, or "in accordance with guild agreement" for union hires
Leaving credit terms vague ("credit to be determined") on a deal memo is a common mistake that creates disputes. Crew members who declined other work based on receiving a certain credit have grounds for a claim if the production changes terms after the fact.
Work Terms
Standard workday length (8, 10, or 12 hours)
Meal break provisions and timing
Travel terms: who pays for travel, class of travel for flights, hotel standard
Location information if the work requires travel away from the crew member's home market
Rights and Releases
Work-for-hire clause: all work product created in the course of the engagement belongs to the production company. This is not automatic, it must be stated explicitly.
Image and likeness release: permission to use behind-the-scenes footage, press photos, and trailer content featuring the crew member
Confidentiality: prohibition on disclosing story details, financial terms, or production information
No obligation to produce: the production reserves the right to not release the finished work without creating liability
Payment Terms and Kill Fee
Payment schedule: weekly, bi-weekly, upon wrap, or by invoice
Payment method: check, ACH direct deposit, or via payroll company
Kill fee: payment owed if the production cancels the engagement after the crew member has been hired. Standard range is 10% to 25% of the total deal value. Without a kill fee clause, a crew member who declined competing work based on this commitment has no recourse when the production cancels.
Expense reimbursement terms and receipt requirements
Worker Classification
The memo should explicitly state whether the hire is a W-2 employment engagement (routed through a payroll company) or a 1099 independent contractor arrangement. Getting this wrong exposes the production to significant tax liability. See the section below on W-2 vs. 1099 for detail.
Exclusivity
Whether the hire is exclusive (the crew member cannot take other work during the engagement) or non-exclusive
"First call" language if exclusivity is too restrictive for the budget
Governing Law and Signatures
The state whose law governs any dispute
Dispute resolution mechanism (arbitration clause or litigation)
Signatures of both parties with dates
Union vs. Non-Union Deal Memos
Non-Union Productions
Non-union productions use their own templates with no prescribed form. Rates are negotiated freely with no minimums beyond state labor law requirements. California law requires 1.5x overtime after 8 hours and 2x after 12 hours regardless of union status, so non-union California productions cannot contract around those requirements even if the crew member agrees to flat-rate arrangements.
SAG-AFTRA (Performers)
SAG-AFTRA signatory productions must use specific performer deal forms, called Start Papers, for each engagement. Rates cannot fall below the applicable agreement minimums (Ultra Low Budget: up to $250,000 budget; Modified Low Budget: up to $700,000; Low Budget: up to $2.5 million; Standard Agreement for larger productions). The production must also remit pension and health contributions (currently 21.5% employer contribution) to the SAG-AFTRA Health Plan. Taft-Hartley forms are used when a production hires a non-union performer, which triggers a 30-day window for the performer to join the union.
IATSE (Below-the-Line Craft Crew)
IATSE covers camera (Local 600), sound (Local 695), props (Local 44), grip/electric, costume, makeup, and other craft departments through a network of local agreements. Deal memos for IATSE members must reference the applicable local agreement and include the correct minimums, box rental rates per the CBA, overtime structure (1.5x after 8 hours, 2x after 12), and meal penalty language. Productions must remit health and pension contributions as required by the local.
DGA (Director, First/Second AD, UPM)
DGA agreements cover directors, first and second assistant directors, and unit production managers on signatory productions. DGA deal memos must include guaranteed preparation days, editing days for directors, and minimum rates from the DGA Basic Agreement or appropriate supplemental agreement. DGA minimum turnaround is 10 hours between wrap and call, shorter than the 12-hour standard under IATSE and SAG-AFTRA.
Deal Memos, Payroll, and Budget Tracking
The deal memo is not just a legal document, it is the source data for two critical production finance functions: payroll processing and budget tracking.
Deal Memo to Payroll
Every crew member's deal memo rate becomes a budget line item and a payroll input. For W-2 employees, the deal memo feeds the payroll company's onboarding system: the crew member's rate, classification, and start date go into the payroll system, and the payroll company handles tax withholding, union contributions, and year-end W-2 issuance. The production pays the payroll company the gross rate plus employer-side taxes and fringe contributions.
For independent contractors (true 1099 workers, vendors, consultants, freelancers who control their own work), the deal memo or service agreement feeds the contractor payment process. Saturation Pay handles contractor and vendor payments in this category: payments are processed directly through the platform and logged automatically against the relevant budget line. This is not payroll, it is contractor payment processing for workers who are legitimately classified as independent contractors.
The most expensive deal memo mistake a production can make is misclassifying W-2 employees as 1099 contractors to avoid the overhead of a payroll company. On-set crew who are directed, supervised, and provided equipment by the production are employees under both IRS guidelines and California's ABC Test. Incorrect 1099 classification exposes the production to back taxes, penalties, and wage claims that can easily exceed the cost of running proper payroll.
Deal Memo to Budget
Every deal memo rate needs to be reflected in the production budget before hiring begins. A line producer who agrees to day rates without verifying they fit within the approved budget creates overages before the first shooting day. The budget should be built from deal memo terms, not the other way around.
Real-time budget tracking against actual deal memo commitments is where cloud-based production finance tools add clear value over desktop spreadsheets. When deal memo rates for all department heads are entered into the budget system, the line producer can see immediately how committed labor costs compare to the budget across every department. For a walkthrough of how production budgets are built from deal memo inputs, see the guide to how to create a film budget.
On productions where the line producer manages both hiring and expense tracking, fringe calculations on deal memo rates are particularly important: the crew member's negotiated rate is just the starting point, and employer-side taxes, pension and health contributions, and workers compensation add 20% to 35% to the actual cost of each hire depending on union agreements and state. Missing fringe in the budget is one of the most common causes of labor cost overruns. For more on how production expense tracking and cost reporting work across the shoot, see the guide to managing film production expenses.
Common Deal Memo Mistakes
Not Signing Before Work Begins
The most common and most dangerous mistake. Production gets busy, the deal memo circulates after the shoot, crew members have different memories of what was agreed to, and now there is a dispute over a rate that was never documented. Sign before day one, without exception.
Vague Overtime Language
Writing "standard overtime" without specifying the rate and trigger creates disputes. "After 10 hours, 1.5x" and "after 8 hours, 1.5x, after 12 hours, 2x" are materially different numbers over a 15-day shoot. State the exact structure in the memo.
Missing Kit Rental as a Separate Line
Many crew members (DPs, sound mixers, gaffers, costume designers) bring their own equipment and expect kit rental on top of their day rate. If the memo does not specify the kit rental amount, the crew member invoices a number the production disputes. Confirm the rate on the memo and confirm whether it is taxable or reimbursable.
No Kill Fee
Independent productions cancel or postpone frequently. Without a kill fee clause, a crew member who turned down other work based on this commitment has no recourse when the production is delayed. A 10% to 25% kill fee clause is standard professional practice and costs nothing to include upfront.
Worker Misclassification
Using a deal memo to engage an on-set crew member as a 1099 contractor when they should be a W-2 employee is not just a tax issue, it is a wage and labor law issue. California's DLSE and the IRS both conduct classification audits of productions. The penalties, including back employer taxes, interest, and potential wage claim liability, routinely exceed the cost of running proper payroll from the start.
Generic Templates Without Legal Review
Templates downloaded from the internet may be missing state-specific provisions, union-required language, or current work-for-hire clause standards. A one-time entertainment attorney review of your production company's standard deal memo template costs a few hundred dollars and protects you on every production that follows.
The Line Producer's Role in Deal Memos
On most productions, the line producer or UPM manages the deal memo process: generating memos from the template, negotiating rates with department heads, routing them for signature, and ensuring all signed memos are collected before shooting begins. The production coordinator typically handles logistics, sending, tracking, filing, but the line producer owns the terms.
Keeping deal memo rates consistent with the approved budget is the line producer's responsibility before a single memo goes out. Rate creep, where department heads negotiate rates higher than budgeted without the line producer catching it, is a frequent source of below-the-line overruns. For a full breakdown of the line producer's responsibilities across all phases of production, see the guide to what a line producer does.
Frequently Asked Questions
What is a deal memo in film?
A deal memo is a short-form agreement (typically 1 to 2 pages) between a production company and a crew member that documents the terms of their hire: rate, role, start date, credit, overtime provisions, and payment terms. It is legally binding from the moment both parties sign and serves as the governing document for most below-the-line crew engagements on independent productions.
Is a deal memo legally binding?
Yes. A signed deal memo is a legally binding contract. The limitation is that it does not address every possible issue, a full long-form agreement would cover IP ownership, indemnification, and credit arbitration in more detail. But the terms documented in the deal memo are enforceable from the moment it is signed.
What is the difference between a deal memo and a contract?
A deal memo is a brief summary of key hire terms, usually generated from a template and signed quickly so work can begin. A full contract is a detailed legal document negotiated by attorneys that addresses every obligation, right, and remedy. For most crew members on independent productions, the deal memo is the only document needed. For directors, showrunners, and key creative talent, a full contract follows the deal memo.
When should a deal memo be signed?
Before the crew member's first day of work, without exception. Signing after work has begun creates disputes about what was agreed to and can affect worker classification. Many productions send deal memos during pre-production, well before shooting starts, to lock in rates and terms across all departments.
What is a kit rental on a deal memo?
Kit rental (also called box rental) is a separate daily or weekly fee paid to a crew member who brings their own equipment to the production. DPs, sound mixers, gaffers, costume designers, and makeup artists commonly negotiate kit rental on top of their day rate. The kit rental amount should be listed as a separate line item on the deal memo and accounted for separately in the production budget.
Do deal memos apply to union crew?
Yes, but union deal memos must reference the applicable collective bargaining agreement and reflect at minimum the required rates, fringe contributions, and working conditions. SAG-AFTRA requires its own Start Paper forms for performers. IATSE deal memos must reference the applicable local agreement. DGA deal memos must include guaranteed prep days and the applicable minimum. Non-union productions can use any template, but state labor law requirements (overtime, meal periods) still apply.
Can I use a deal memo for independent contractors?
A deal memo or service agreement can be used for independent contractors, but the worker must actually qualify as an independent contractor under IRS guidelines and the applicable state's ABC Test. On-set crew who are directed, supervised, and provided equipment by the production are employees, not contractors. Using a deal memo to misclassify employees as contractors creates tax, wage, and labor law liability. Genuine contractors, vendors, consultants, post-production vendors, can be engaged with a deal memo or service agreement and paid through contractor payment platforms like Saturation Pay.
What is a kill fee on a deal memo?
A kill fee is the payment owed to a crew member if the production cancels the engagement after they have been hired. It compensates the crew member for declining other work based on this commitment. Standard kill fees range from 10% to 25% of the total deal value. Without a kill fee clause, a crew member has no contractual recourse when a production is postponed or cancelled.
By Jens Jacob, film producer and co-founder of Saturation
A film crew deal memo is the agreement between a production company and a crew member that documents the terms of their hire: rate, role, start date, credit, and working conditions. It is typically one to two pages long, signed before or on the first day of work, and serves as the binding document governing the relationship for the duration of the engagement.
Deal memos are the operational backbone of production hiring. They move fast, they have to be accurate, and the mistakes productions make with them create expensive problems later. This guide covers what goes into a deal memo, how union and non-union memos differ, how deal memos connect to payroll and budget tracking, and the mistakes that cause real damage.
What Is a Film Crew Deal Memo?
A deal memo is a short-form agreement that captures the key terms of a crew hire in a format that can be generated, signed, and returned in hours rather than weeks. It is not a full contract, but it is legally binding from the moment both parties sign it.
The name comes from the idea of a "memorandum of deal terms", a summary of the essential points agreed to, with the understanding that a longer-form agreement may follow for senior hires. For most below-the-line crew on independent productions, the deal memo is the only document ever signed. For directors, showrunners, and key creative talent, it precedes a full long-form agreement negotiated by attorneys.
Productions use deal memos because the alternative is chaos. Without a signed document, disputes arise over what rate was agreed to, whether the hire was for five or eight days, who owns the footage shot on the crew member's personal camera, and what credit they are owed. The deal memo eliminates these disputes by creating a shared written record before work begins.
Deal Memo vs. Full Contract: What Is the Difference?
Factor | Deal Memo | Full Contract |
|---|---|---|
Length | 1 to 2 pages | 5 to 30+ pages |
Purpose | Confirms key terms so work can begin immediately | Documents every obligation, right, and remedy in detail |
Timeline | Signed on or before day one of production | Negotiated weeks or months ahead; requires attorney review |
Legal weight | Legally binding but leaves gaps | Fully enforceable with no ambiguity |
Who drafts it | Production coordinator, UPM, or line producer using a template | Entertainment attorney |
Risk | Binding on the agreed terms; silent on everything else | Stronger enforcement; remedies are defined |
The critical legal point is that a deal memo is legally binding from the moment it is signed. The danger is not enforceability, it is that the memo is silent on issues a full contract would address, leaving gaps that courts fill unpredictably. A production relying only on deal memos for VFX supervisors, composers, or other crew with complex IP contributions creates real exposure around ownership, credit, and residuals.
For day players and most below-the-line crew on indie productions, the deal memo is sufficient. For the director, key above-the-line talent, and any hire that involves original creative contributions beyond pure service work, a full long-form agreement should follow the deal memo.
What Every Film Crew Deal Memo Must Include
A production-ready deal memo needs these sections. Omitting any of them creates disputes.
Identity and Project Information
Production company legal name and contact information
Project title and format (feature film, short, commercial, music video, episodic TV)
Crew member's full legal name, address, phone, and email
Social Security Number or EIN, required for tax reporting and payroll processing
Start date and anticipated wrap date or guaranteed number of days
Job title exactly as it will appear on the call sheet and in payroll records
Compensation
Day rate, weekly rate, or flat fee stated as a gross amount before taxes
Guaranteed minimum: the number of days or weeks the production guarantees, regardless of whether shooting runs short
Box rental / kit rental: a separate daily or weekly rate for crew members who bring their own equipment (DPs, sound mixers, gaffers, costume designers). This is distinct from the labor rate and must be stated as a separate line.
Overtime rate: typically 1.5x after 8 hours, 2x after 12 hours. California labor law sets these minimums regardless of what the memo says or whether the crew member is union. State law controls.
Meal penalty: a flat fee triggered if a meal break is not provided within 6 hours of call time
Per diem: daily allowance for food and incidental expenses on location shoots
Car allowance or mileage reimbursement if the crew member is using their own vehicle
Screen Credit
Credit title, stated exactly (e.g., "Director of Photography" not "DP" or "Cinematographer")
Card type: single card, shared card, or end roll
Placement: main titles, end titles, or "in accordance with guild agreement" for union hires
Leaving credit terms vague ("credit to be determined") on a deal memo is a common mistake that creates disputes. Crew members who declined other work based on receiving a certain credit have grounds for a claim if the production changes terms after the fact.
Work Terms
Standard workday length (8, 10, or 12 hours)
Meal break provisions and timing
Travel terms: who pays for travel, class of travel for flights, hotel standard
Location information if the work requires travel away from the crew member's home market
Rights and Releases
Work-for-hire clause: all work product created in the course of the engagement belongs to the production company. This is not automatic, it must be stated explicitly.
Image and likeness release: permission to use behind-the-scenes footage, press photos, and trailer content featuring the crew member
Confidentiality: prohibition on disclosing story details, financial terms, or production information
No obligation to produce: the production reserves the right to not release the finished work without creating liability
Payment Terms and Kill Fee
Payment schedule: weekly, bi-weekly, upon wrap, or by invoice
Payment method: check, ACH direct deposit, or via payroll company
Kill fee: payment owed if the production cancels the engagement after the crew member has been hired. Standard range is 10% to 25% of the total deal value. Without a kill fee clause, a crew member who declined competing work based on this commitment has no recourse when the production cancels.
Expense reimbursement terms and receipt requirements
Worker Classification
The memo should explicitly state whether the hire is a W-2 employment engagement (routed through a payroll company) or a 1099 independent contractor arrangement. Getting this wrong exposes the production to significant tax liability. See the section below on W-2 vs. 1099 for detail.
Exclusivity
Whether the hire is exclusive (the crew member cannot take other work during the engagement) or non-exclusive
"First call" language if exclusivity is too restrictive for the budget
Governing Law and Signatures
The state whose law governs any dispute
Dispute resolution mechanism (arbitration clause or litigation)
Signatures of both parties with dates
Union vs. Non-Union Deal Memos
Non-Union Productions
Non-union productions use their own templates with no prescribed form. Rates are negotiated freely with no minimums beyond state labor law requirements. California law requires 1.5x overtime after 8 hours and 2x after 12 hours regardless of union status, so non-union California productions cannot contract around those requirements even if the crew member agrees to flat-rate arrangements.
SAG-AFTRA (Performers)
SAG-AFTRA signatory productions must use specific performer deal forms, called Start Papers, for each engagement. Rates cannot fall below the applicable agreement minimums (Ultra Low Budget: up to $250,000 budget; Modified Low Budget: up to $700,000; Low Budget: up to $2.5 million; Standard Agreement for larger productions). The production must also remit pension and health contributions (currently 21.5% employer contribution) to the SAG-AFTRA Health Plan. Taft-Hartley forms are used when a production hires a non-union performer, which triggers a 30-day window for the performer to join the union.
IATSE (Below-the-Line Craft Crew)
IATSE covers camera (Local 600), sound (Local 695), props (Local 44), grip/electric, costume, makeup, and other craft departments through a network of local agreements. Deal memos for IATSE members must reference the applicable local agreement and include the correct minimums, box rental rates per the CBA, overtime structure (1.5x after 8 hours, 2x after 12), and meal penalty language. Productions must remit health and pension contributions as required by the local.
DGA (Director, First/Second AD, UPM)
DGA agreements cover directors, first and second assistant directors, and unit production managers on signatory productions. DGA deal memos must include guaranteed preparation days, editing days for directors, and minimum rates from the DGA Basic Agreement or appropriate supplemental agreement. DGA minimum turnaround is 10 hours between wrap and call, shorter than the 12-hour standard under IATSE and SAG-AFTRA.
Deal Memos, Payroll, and Budget Tracking
The deal memo is not just a legal document, it is the source data for two critical production finance functions: payroll processing and budget tracking.
Deal Memo to Payroll
Every crew member's deal memo rate becomes a budget line item and a payroll input. For W-2 employees, the deal memo feeds the payroll company's onboarding system: the crew member's rate, classification, and start date go into the payroll system, and the payroll company handles tax withholding, union contributions, and year-end W-2 issuance. The production pays the payroll company the gross rate plus employer-side taxes and fringe contributions.
For independent contractors (true 1099 workers, vendors, consultants, freelancers who control their own work), the deal memo or service agreement feeds the contractor payment process. Saturation Pay handles contractor and vendor payments in this category: payments are processed directly through the platform and logged automatically against the relevant budget line. This is not payroll, it is contractor payment processing for workers who are legitimately classified as independent contractors.
The most expensive deal memo mistake a production can make is misclassifying W-2 employees as 1099 contractors to avoid the overhead of a payroll company. On-set crew who are directed, supervised, and provided equipment by the production are employees under both IRS guidelines and California's ABC Test. Incorrect 1099 classification exposes the production to back taxes, penalties, and wage claims that can easily exceed the cost of running proper payroll.
Deal Memo to Budget
Every deal memo rate needs to be reflected in the production budget before hiring begins. A line producer who agrees to day rates without verifying they fit within the approved budget creates overages before the first shooting day. The budget should be built from deal memo terms, not the other way around.
Real-time budget tracking against actual deal memo commitments is where cloud-based production finance tools add clear value over desktop spreadsheets. When deal memo rates for all department heads are entered into the budget system, the line producer can see immediately how committed labor costs compare to the budget across every department. For a walkthrough of how production budgets are built from deal memo inputs, see the guide to how to create a film budget.
On productions where the line producer manages both hiring and expense tracking, fringe calculations on deal memo rates are particularly important: the crew member's negotiated rate is just the starting point, and employer-side taxes, pension and health contributions, and workers compensation add 20% to 35% to the actual cost of each hire depending on union agreements and state. Missing fringe in the budget is one of the most common causes of labor cost overruns. For more on how production expense tracking and cost reporting work across the shoot, see the guide to managing film production expenses.
Common Deal Memo Mistakes
Not Signing Before Work Begins
The most common and most dangerous mistake. Production gets busy, the deal memo circulates after the shoot, crew members have different memories of what was agreed to, and now there is a dispute over a rate that was never documented. Sign before day one, without exception.
Vague Overtime Language
Writing "standard overtime" without specifying the rate and trigger creates disputes. "After 10 hours, 1.5x" and "after 8 hours, 1.5x, after 12 hours, 2x" are materially different numbers over a 15-day shoot. State the exact structure in the memo.
Missing Kit Rental as a Separate Line
Many crew members (DPs, sound mixers, gaffers, costume designers) bring their own equipment and expect kit rental on top of their day rate. If the memo does not specify the kit rental amount, the crew member invoices a number the production disputes. Confirm the rate on the memo and confirm whether it is taxable or reimbursable.
No Kill Fee
Independent productions cancel or postpone frequently. Without a kill fee clause, a crew member who turned down other work based on this commitment has no recourse when the production is delayed. A 10% to 25% kill fee clause is standard professional practice and costs nothing to include upfront.
Worker Misclassification
Using a deal memo to engage an on-set crew member as a 1099 contractor when they should be a W-2 employee is not just a tax issue, it is a wage and labor law issue. California's DLSE and the IRS both conduct classification audits of productions. The penalties, including back employer taxes, interest, and potential wage claim liability, routinely exceed the cost of running proper payroll from the start.
Generic Templates Without Legal Review
Templates downloaded from the internet may be missing state-specific provisions, union-required language, or current work-for-hire clause standards. A one-time entertainment attorney review of your production company's standard deal memo template costs a few hundred dollars and protects you on every production that follows.
The Line Producer's Role in Deal Memos
On most productions, the line producer or UPM manages the deal memo process: generating memos from the template, negotiating rates with department heads, routing them for signature, and ensuring all signed memos are collected before shooting begins. The production coordinator typically handles logistics, sending, tracking, filing, but the line producer owns the terms.
Keeping deal memo rates consistent with the approved budget is the line producer's responsibility before a single memo goes out. Rate creep, where department heads negotiate rates higher than budgeted without the line producer catching it, is a frequent source of below-the-line overruns. For a full breakdown of the line producer's responsibilities across all phases of production, see the guide to what a line producer does.
Frequently Asked Questions
What is a deal memo in film?
A deal memo is a short-form agreement (typically 1 to 2 pages) between a production company and a crew member that documents the terms of their hire: rate, role, start date, credit, overtime provisions, and payment terms. It is legally binding from the moment both parties sign and serves as the governing document for most below-the-line crew engagements on independent productions.
Is a deal memo legally binding?
Yes. A signed deal memo is a legally binding contract. The limitation is that it does not address every possible issue, a full long-form agreement would cover IP ownership, indemnification, and credit arbitration in more detail. But the terms documented in the deal memo are enforceable from the moment it is signed.
What is the difference between a deal memo and a contract?
A deal memo is a brief summary of key hire terms, usually generated from a template and signed quickly so work can begin. A full contract is a detailed legal document negotiated by attorneys that addresses every obligation, right, and remedy. For most crew members on independent productions, the deal memo is the only document needed. For directors, showrunners, and key creative talent, a full contract follows the deal memo.
When should a deal memo be signed?
Before the crew member's first day of work, without exception. Signing after work has begun creates disputes about what was agreed to and can affect worker classification. Many productions send deal memos during pre-production, well before shooting starts, to lock in rates and terms across all departments.
What is a kit rental on a deal memo?
Kit rental (also called box rental) is a separate daily or weekly fee paid to a crew member who brings their own equipment to the production. DPs, sound mixers, gaffers, costume designers, and makeup artists commonly negotiate kit rental on top of their day rate. The kit rental amount should be listed as a separate line item on the deal memo and accounted for separately in the production budget.
Do deal memos apply to union crew?
Yes, but union deal memos must reference the applicable collective bargaining agreement and reflect at minimum the required rates, fringe contributions, and working conditions. SAG-AFTRA requires its own Start Paper forms for performers. IATSE deal memos must reference the applicable local agreement. DGA deal memos must include guaranteed prep days and the applicable minimum. Non-union productions can use any template, but state labor law requirements (overtime, meal periods) still apply.
Can I use a deal memo for independent contractors?
A deal memo or service agreement can be used for independent contractors, but the worker must actually qualify as an independent contractor under IRS guidelines and the applicable state's ABC Test. On-set crew who are directed, supervised, and provided equipment by the production are employees, not contractors. Using a deal memo to misclassify employees as contractors creates tax, wage, and labor law liability. Genuine contractors, vendors, consultants, post-production vendors, can be engaged with a deal memo or service agreement and paid through contractor payment platforms like Saturation Pay.
What is a kill fee on a deal memo?
A kill fee is the payment owed to a crew member if the production cancels the engagement after they have been hired. It compensates the crew member for declining other work based on this commitment. Standard kill fees range from 10% to 25% of the total deal value. Without a kill fee clause, a crew member has no contractual recourse when a production is postponed or cancelled.
By Jens Jacob, film producer and co-founder of Saturation
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