How to Pay Yourself and Your Team in a Video Production Company

Pay Yourself First, Like a Line Item

Most owners on the show started the same way: the business took money and gave none back. The fix is not a bigger project, it is a decision. In video production lessons for 2022, Dario and Kyrill describe paying themselves a consistent monthly salary for the first time, and how turning payroll into a non-negotiable line item quietly forced the company to behave like a company, right as they moved to incorporate.

Spencer Stanley of Vanguard Creative set the clearest first test in the archive. He went full time in Winnipeg in May 2020, straight into a pandemic, with one benchmark for the year, laid out in growing your video production business.

“If in my first year I can have the same salary that I would have as an entry-level marketing job, this makes sense, and I'm gonna go and try and do that. So I did that, I succeeded that, and it's been growing since.”

Spencer Stanley, Vanguard Creative (Episode 35)

Thomas Ackels of Offbeat Films and the hosts admitted the same fear on how to build relationships and manage budgets: payroll makes it real, and putting the owners on salary was the step that forced them to stare at the numbers. The mental shift that makes it possible came up early on the show, in how to find work in your local community: employees translate everything into hourly equivalents, while owners think in chunks. A project pays Kyrill, pays Dario, pays the freelancers, and leaves a chunk for the business, the lights, and the storage locker. Bigger companies, the hosts note, graduate to thinking in percentages.

Salary or Distributions?

Once the owners are paid, the next question is how. Kyler Beal of Minivan Productions walked through the switch in detail on salaries, slicing pie, and quarterly profit sharing. Minivan moved its owners from distributions to salary around 2021, when it hired its first employee, and Kyler admits it was scary. With distributions, the owners could see a slow month coming and skip a payment. With payroll, everyone gets paid, plus medical, dental, and vision benefits and retirement matching, so the question becomes where the money comes from. Payroll is still Minivan’s largest monthly expense, but salary brought clarity, easier forecasting, and a lower effective tax rate overall, even counting employer taxes. Today Kyler is paid a regular salary as an owner with distributions on top.

Lapse is making the same move in January, from dividends to salary, and the reasons are practical rather than philosophical: a future mortgage application, Canada Pension Plan contributions, room to contribute to an RRSP, and disability insurance, which Lapse was refused because its owners paid themselves dividends. Dario modeled the numbers with Claude using the company’s own books, after having it rebuild the year-end package from every invoice and bank statement, a story told on from free promo videos to tech launch videos. On the same episode, Vlad Lapich of LV Productions laid out the US version: an LLC is pass-through and simple, while a corporation pays the owner a salary and taxes the rest at a lower rate, which is worth the extra bookkeeping past a certain profit. In both countries the accountant has the final word.

What a Salary Really Costs

The first employee is where most owners get a shock. When Dario and Kyrill priced out what one full-time person would actually cost, the number reframed the whole hiring question, and Tyler Mose of MatchPoint Studio supplied the line items on scaling your business: employment tax, unemployment tax, and benefits add 12 to 15 percent on top of every salary in the United States and get worse each year. That is part of why he guards a margin of about 60 percent, measured per project rather than on blended revenue, because that margin has to cover gear, vans, servers, payroll, benefits, and taxes and still pay the owner.

So the owners hire slowly. Pat Henderson grew Path8 Productions to six full-timers one deliberate hire at a time, on a simple rule from empowering your team and elevating morale: hire when consistent, recurring work can carry the salary even if a few months go quiet. Jesse Nakano and Denver Capcara of Old Saw Studio nearly hired a full-time editor during a busy September and held off, correctly guessing the volume would not last, as they explain in building a strong partnership. The full hiring decision is mapped in our guide to freelancers vs employees.

“I'd rather hire an employee, or at least have that be part of an employee's salary, than a space that we go to.”

Pat Henderson, Path8 Productions (Episode 52)

Paying Crew: Day Rates, Hourly, or Per Project

Below the owners and any salaried staff sits the crew, and here most of the archive keeps pay variable on purpose. Edward Holub has run New Orleans Video Productions since 2002 on pure economics, explained on the rise and fall of the film industry in Louisiana: a great producer or second does not want to sit idle on payroll in a slow stretch, and you do not want to pay for that idle time, so bring them in at their day rate for the job and let them work elsewhere in between. Chris Stasiuk of Signature Video Group calls the same idea a roster, not a payroll, on New Year’s goals, growth, and Gen AI: a deep bench of trusted freelancers lets a studio flex up for a big production and back down without carrying fixed cost through the famine months. Knowing the going videographer day rates is what makes the comparison honest.

Editing is where owners split. Lapse pays editors a custom per-project quote. Vlad Lapich asks his editors to log hours and bill hourly, estimates the total himself, and eats the difference when he misses. The bigger variable is the client: two identical twenty-hour projects can land at fifteen and forty depending on how picky the reviewer is, so Vlad prices the extra hours into that client’s next quote rather than fighting mid-project. Whatever the model, Guy Bauer of Umault offered the rule of thumb that protects it on transitioning from generalist to specialist: if the budget is twenty, plan for about half to go to freelancers, and price for the project management and revisions on the backend instead of marking up an editor’s rate by a little. Umault targets 30 to 40 percent to the business on that basis.

Paying for Sales: Commission, Flat Fee, or a Book of Business

Sales pay produced three different answers. Tyler Mose builds MatchPoint by stacking salespeople: each one gets a book of business built from past accounts plus new ones they farm, and another seller is added as revenue per head hits his numbers. It is brutal hiring, since only 30 to 40 percent of the salespeople he brings on actually make it, and the ones who last arrive with a track record of selling content or information.

“If you're not selling, someone else is taking business from you.”

Tyler Mose, MatchPoint Studio (Episode 65)

Erik Croswell of Bridge City Media pays for relationships instead. His part-time social media coordinator doubles as the studio’s networker on an hourly rate plus a sliding commission: 15 percent on relationships she personally brings in, 10 percent on networking-sourced work, and 5 percent on deals she only helps nudge, with a per-project cap so one large job does not eat the margin. The full setup is in the path to B Corp and networking. Sam Rossiello of Captiv Creative went the opposite way on creating connections and content in video production: an offshore outbound team paid a flat monthly retainer with no commission, running seven or eight touches across email, LinkedIn, and calls, which produced five or six pipeline meetings in two months.

Sharing the Upside: Profit Sharing

Profit sharing is the most detailed system in the archive, and it comes from Minivan. Its operating agreement keeps much of each year’s profit in the company, and on top of that every profitable quarter is split into four buckets. The first is giving: ten percent of profit, with each team member choosing the organization their share supports. Then come retained earnings, an employee bucket distributed to the team, and an ownership bucket. The split works on tiers, a little like tax brackets: when profit is thin, more is retained to cushion a bad month or quarter, and as profit grows the top tiers flow increasingly to employees. Kyler says it took a lot of guess and check.

The cadence matters as much as the formula. Annual profit sharing is common and less risky for the company, but Minivan once shot a documentary series with roughly 65 days on the road, and asking people to wait nine months to be rewarded for that season felt wrong. Quarterly lets the team share the proceeds of a hard stretch, or of a stretch where their process was so efficient it simply created more profit. Kyrill’s caveat is the right one: the model makes the most sense with a committed salaried team, not two owners and a bench of freelancers.

Equity: Slicing Pie and the Long Game

Ownership is the last and most permanent form of pay. Minivan splits it with slicing pie, a risk-based method built for bootstrapped companies. If your time is worth a hundred dollars an hour and you are paid nothing, or fifty, the gap is what you are risking, and it becomes your slices. Cash counts at a higher multiplier because it is the riskiest thing to put in, and equipment, ideas, and relationships can carry their own. Once nobody is risking anything, because everyone earns a competitive salary and the company buys its own gear, the pie freezes. Minivan froze its pie about five years ago, which is why a partner who stepped back from operations still owns 24.6 percent and receives his share of distributions. The partner side of that story is in our guide to business partnerships in video production.

Rupert Rixon of Perspective Pictures frames the bigger choice on growing and investing in your team: profit early is the enemy of growth. Reinvesting compounds, so decide whether you want a lean, high-margin cash machine or something bigger that runs without you and can one day be sold, with the team sharing in that exit through equity. How ownership changes hands when that day comes is covered in buying or selling a video production company.

Where the Owners Disagree

On four questions the archive does not agree, and the disagreement is useful. Salary or flexibility: Minivan chose the clarity of payroll and found it cheaper in tax, while distributions keep the option to skip a slow month, which is exactly what Minivan gave up. Roster or payroll: Path8 and Minivan built salaried teams one hire at a time, while New Orleans Video Productions and Signature Video Group argue for a roster of freelancers, and Vanguard Creative adds that the best talent often freelances anyway. Commission or flat fee: Bridge City ties its networker’s pay to what she brings in, Captiv deliberately pays its sales team no commission, and MatchPoint gives sellers a book to grow. Take profit or reinvest: Perspective Pictures reinvests toward a sale, while lean shops take the margin as pay. None of these is wrong. Each fits a different shape of company, which is why the first question is always what kind of company you are building.

What We Are Doing at Lapse

We are still two owners and a bench of trusted freelancers, so most of this guide is a map of where we are headed rather than where we are. We started paying ourselves a consistent monthly amount in 2022, have taken it as dividends since incorporating, and switch to salary in January for the mortgage, pension, retirement, and disability insurance reasons above. Editors get a custom per-project quote. Profit sharing will wait until there is a committed team to share it with, and when there is, Minivan’s quarterly buckets are the model we will start from.

The Playbook

Distilled from fifteen episodes, in the order most owners face it.

1. Set the margin first. Decide what share of every project stays with the business (the archive ranges from 30 to 60 percent) and price so it survives before anyone is paid extra.
2. Put the owners on a consistent salary. Start with a number the business can carry every month, even an entry-level salary, and treat it as a line item, not a reward.
3. Choose salary or distributions with your accountant. Salary buys clarity, benefits, and lending and insurance eligibility; distributions buy flexibility in a slow month. The tax answer depends on your country and structure.
4. Price every hire at its full cost. Add employment taxes and benefits (12 to 15 percent in the United States) and hire only when recurring work can carry the total through a quiet quarter.
5. Keep crew pay variable. Build a roster of trusted freelancers on day rates or per-project quotes, and plan for about half of a budget to go to them.
6. Pick one sales pay model and cap it. Commission, flat fee, or a book of business all work; a per-project cap keeps one large deal from eating the margin.
7. Share profit in small, frequent slices. Once you have a committed team, share profitable quarters in tiers that keep more in the company when profit is thin.
8. Split equity by risk, then freeze it. Use a risk-based model while founders work below market, and freeze the split once everyone is paid a competitive salary.

Frequently Asked Questions

Source Episodes

Every perspective in this guide comes from an on-the-record conversation. Go deeper with the full episodes:

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