The mechanism
Productions hire your company, and your company hires you.
A loan-out is a little company (almost always an S-corp) that owns exactly one thing: you. When you book a job, the production hires the company. The payroll company pays the company — no withholding, the whole check. Then YOUR company pays YOU a salary and picks up the tab for running your career.
That little detour is the whole trick, and it buys two things. One: your write-offs come back. Since 2018, W-2 performers can’t deduct commissions, classes, or dues federally — but companies deduct their business expenses just fine, and through a loan-out that’s exactly what those costs become. Two: payroll-tax planning — the company pays you a reasonable salary and can hand you the rest without self-employment tax on top.
The costs
It is a real company, with a real company's overhead.
Here’s the part the party conversation skips: you now own a company, and companies are needy. Formation paperwork. A payroll service so your company can pay you like an employer. Its own tax return every year. Registered-agent fees. And state charges — California bills $800 a year just for the privilege of existing. Budget four figures annually before you see dollar one of benefit.
Two traps worth knowing by name. “Reasonable salary” is a real IRS rule, not a vibe — paying yourself $20,000 on $400,000 of bookings is how audits start. And states keep changing their minds about loan-outs (California especially has poked at them lately), so this is a structure you run WITH a professional. Not from a blog post. Including this one.
The verdict
When the math starts working.
The costs are flat; the benefits grow with your income. That’s the whole equation. Below high, steady six figures, the company mostly eats its own savings. Above it, the restored write-offs and the payroll planning start compounding, and the “Inc.” earns its keep. The honest rule of thumb: when your commissions alone cost more than a company would cost to run, it’s time to sit down with a professional and your real numbers. WorkMade watches your income and taps you on the shoulder when that day comes.
Loan-out questions, answered.
What is a loan-out company?
A small company you own that 'loans' your services to productions. The production pays your company instead of you; your company pays you a salary. The point: your commissions, dues, and career costs become the company's business expenses — deductible again — and S-corp payroll planning can trim your taxes on top.
How much money should I make before starting a loan-out?
There's no official number, and anyone quoting one is probably selling something. The industry rule of thumb is high, STEADY income — usually discussed in the low-to-mid six figures — because below that, the company's running costs (payroll, corporate return, state fees) eat the savings. Sit down with a professional and your real numbers before you form anything.
What does a loan-out cost to run?
Plan on four figures a year: a payroll service (so your company can pay you), a corporate tax return, registered-agent and filing fees, and state charges — California's minimum is $800 a year just for existing. Setting it up costs extra, and you may need to register in the states where you work.
Does a loan-out avoid self-employment taxes?
Partly — that's one of the perks, used carefully. The company pays you a reasonable salary (fully taxed like any paycheck) and can pass along remaining profit without self-employment tax. The key word is 'reasonable': the IRS insists your salary actually match your work, and lowballing it is the classic way loan-outs get audited.
Do productions pay loan-outs differently?
Yes — the payroll company pays your corporation the full amount, no income tax withheld, and your corporation handles paying (and withholding for) you. States occasionally rethink how they treat this — California has poked at loan-out withholding more than once — so keep a professional in the loop on your state.
Can I deduct agent commissions through a loan-out?
Yes — that's basically the whole point. Commissions, manager fees, union dues, coaching, and professional costs become your company's ordinary business expenses, which brings back the deductions W-2 performers lost federally in 2018.
We’ll tell you
when it’s time.
WorkMade tracks your real income and taps you on the shoulder the moment a loan-out conversation is worth having.
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